Lightbridge (LTBG)

Company

"Lightbridge is a leading transaction processing company that businesses trust to manage customer transactions for greater profitability. Lightbridge adds value to fraud prevention, credit qualification, payment processing. Businesses use Lightbridge to make smarter decisions, deliver better services, ensure secure transactions, reduce costs and increase revenues and profits." (company website)

Buy

7-Aug-06. Lightbridge peaked in June and has been making its way back down since then. The 50-day moving average has turned down. Last week LTBG touched up with the downtrend line, from which it will continue to fall, if the pattern holds.

• Price momentum (PPO) — negative
• Trend (ADX) — weakened during latest steps up, but selling pressure (-DI) is still well above buying pressure (+DI)
• Money flow (CMF) — negative for past month, now neutral but pointing down
• Relative strength (RSI) — steady decline over past six weeks
• Volume — the only days significantly above normal volume have been down days

Buy to cover

17-Aug-06. Another opportunity missed. Two days ago, LTBG took a big dive, trading as low as $10.57 at one point, bringing it below the 200-day moving average. Did I cover my short then and pocket a tidy bit of change? Noooooo! The voice of greed won that argument. Today, when it starting climbing again, I covered for a small profit.

Looking back over recent trades, I can see that I've gotten much better at picking stocks to short and even selling them short at the right time. (See RNWK and PLB, for example.) What I haven't gotten good at is covering at the right time. In all three of these cases, there was a sudden price collapse followed by recovery. The moral of the story seems to be, Cover when the price collapses and say thank you.

It's still possible that LTBG will rise a bit more to test the 1-month average and then fall back down again. But given my experience with RNWK and PLB, I really didn't want to take the chance.