TASER Intl (TASR)

Company

"TASER International, Inc. provides advanced non-lethal devices for use in the law enforcement, military, private security and personal protection markets. TASER devices use proprietary technology to incapacitate dangerous, combative or high-risk subjects who pose a risk to law enforcement officers, innocent citizens or themselves in a manner that is generally recognized as a safer alternative to other uses of force. TASER technology saves lives every day, and the use of TASER devices dramatically reduces injury rates for police officers and suspects." (company website)

Buy

11-Nov-05. TASER Int'l reported earnings on October 26, and the stock price shot up the next trading day. Although the bottom line results weren't impressive, TASR did report a big jump in gross margin and lower SGA expenses compared to the previous quarter. Since then a wrongful death suit against TASER has also been dismissed. I am counting on this to reverse a very long, steep downtrend (see sidebar); Market Edge has TASR as an "early buy."

• Price momentum (PPO) — increasing rapidly
• Trend (ADX) — strengthening again after earnings report
• Money flow (CMF) — barely positive, but greatly improved over past three months
• Relative strength (RSI) — strengthened significantly in past six weeks
• Volume — big price jumps were on big volumes

Sell

15-Nov-05. Stunned by TASR! Taser took a giant step backwards yesterday and dropped even more at today's open. The company announced that it had filed for a delay of its earnings report, due to the fact that it has to restate two of the previous quarters. That is never good news. In other circumstances, I might be tempted to hang on in the expectation of a bounce off the 50-day moving average. With restatements hanging over the stock, I think it's best to just take a loss and bail.