MIPS Technologies (MIPS)

Company

"MIPS Technologies, Inc. is a leading provider of industry-standard processor architectures and cores for digital consumer and business applications. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers and system OEMs. MIPS Technologies and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products." (company website)

MIPS 3-month stock chart

Buy

25-Aug-06. MIPS went into a steep slide after peaking in February, but the trend line was broken in July (see sidebar), about the time of its earnings report. After a brief pullback, it is rising again.

  • Price momentum (PPO) — gathering momentum over past three months
  • Trend (ADX) — strengthening, with buying pressure (+DI) well above selling pressure (-DI)
  • Money flow (CMF) — steadily improving over past three months, now neutral
  • Relative strength (RSI) — steady strengthening over three months
  • Volume — higher-than-normal volume for price jumps

Sell

loss Bottom line
-1%

28-Sep-06. This still looks like it was a good call. MIPS stayed above the 200-day moving average for three weeks, eventually touching the upper Bollinger band when it had narrowed (usually taken as a signal of an impending move, one way or another). The move to the lower Bollinger band, also typical, might have been followed by a bounce up, and for two days that looked like the case. Yesterday, however, MIPS declined again. In view of the weakening indicators in the chart, I decided to sell rather than risk losses. While the decision may have been premature, I am chastened by the substantial loss taken today, incurred as a result of shorting CPWM.

MIPS 1-year chart
MIPS 1-year chart