O2Micro (OIIM)

Company

"O2Micro develops and markets innovative power management, and security components and systems for the Computer, Consumer, Industrial, and Communications markets. Products include Intelligent Lighting, Battery Management, Power Management, SmartCardBus® and Security products, such as VPN/Firewall system solutions." (company website)

OIIM 3-month stock chart

Buy

29-Sep-06. O2Micro has been trending down for the past year, with the trendline steepening after March (see sidebar). It looks like OIIM bottomed in August and is on the way back up. The 1-month average has turned up and the 50-day average is leveling out. Since peaking near $7, OIIM has retrenched 62%. This is the third consecutive up-day.

  • Price momentum (PPO) — picking up quickly in past two months
  • Trend (ADX) — trend is below threshhold (20), but buying pressure (+DI) has picked up
  • Money flow (CMF) — outflow has slowed, now almost neutral
  • Relative strength (RSI) — increased since early August
  • Volume — broke above the 50-day moving average with two days of heavier-than-normal volume

Sell

loss Bottom line
-6%

6-Oct-06. In the gloomy start of today's trading session, my stop-loss order for OIIM was triggered when it traded at $6.37 or less. Since the sale, OIIM is recovering on at least normal volume. Nothing in the chart looks like a show-stopper to me: it is back above the 1-month moving average; money inflow is strengthening; stochastic RSI is pointing up. This may have just been a case of the trailing stop being too tight. I think I will look again at the stock after the close of the session and consider jumping back in.

OIIM 1-year chart
OIIM 1-year chart