Landec (LNDC)

Company

"Landec Corporation and its subsidiaries design, develop, manufacture, and sell temperature-activated and other specialty polymer products for the food and agricultural applications. In addition, outside of food and ag, the Company will selectively work with industry leaders as licensed partners. The Company's strategy is to identify commercially attractive business opportunities and to seek market share through the application of its proprietary, enabling Intelimer technology." (company website)

Buy

21-Aug-06. Landec started a strong uptrend in February, and has been building a base between $8 and $9 for about three months. The most recent earnings report prodded LNDC above the base. After it broke above $10 for the second time, I put in an order to buy at $10, guessing that it would pull back from the big jump. Now the question is whether it is done pulling back!

• Price momentum (PPO) — picking up strongly
• Trend (ADX) — above the threshhold (20), and buying pressure (+DI) is still above selling pressure (-DI)
• Money flow (CMF) — flowing into the stock
• Relative strength (RSI) — gradual strengthening over past three months, but nothing dramatic
• Volume — big volumes for the jump above $10

Sell

30-Aug-06. Oops! Yesterday I was feeling quite smug about LNDC — it was in its second day of pulling up from my purchase price with heavier-than-normal volume. Today it opened higher and moved higher still. Yippee! Then suddenly the floor fell out and LNDC plummeted. When I saw that it was close to erasing all the gain, I jumped in with a sell order to at least salvage a few bucks. There are two things in the chart (otherwise quite positive looking) that made me jump: Relative strength (RSI) is falling, however slightly, and the stochastic RSI, which tends to be more predictive, is also falling. Better safe than sorry, that's my motto!