Champion Enterprises (CHB)

Company

"Champion Enterprises, Inc. is a leader in factory-built construction, operating 36 manufacturing facilities in North America and the United Kingdom, and partnering with over 3,000 independent retailers, builders and developers. The Company produces manufactured and modular homes through its family of homebuilders, as well as modular commercial buildings for military and commercial applications." (company website)

Buy

27-Oct-06. My position in Champion was stopped out shortly after I bought; since earnings were due soon, I decided to wait until after earnings. CHB beat Expectations by 1¢, and I should have jumped in the very next day, when I could have gotten back in for almost the same price. Unfortunately, I missed the boat and had to jump in today at a much higher price, after two very high volume days.

• Price momentum (PPO) — steadily picking up
• Trend (ADX) — strengthening, and buying pressure (+DI) is picking up
• Money flow (CMF) — steadily improving and now strong inflow
• Relative strength (RSI) — steady strengthening, now overbought
• Volume — average volume >1 million shares/day

Sell

31-Oct-06. I was annoyed when my trailing stop dumped me out of my previous position in Champion so I jumped back in. Hardly had I done so when I began to believe that I had overpaid, and today's session simply confirmed that: CHB was unable to hold the opening price and has continued to fall. I see several warning signs in the chart: buying pressure (+DI) has started to drop off; relative strength (RSI) is ticking down, as is the stochastic RSI. I think some of the euphoria from the earnings announcement is wearing off and CHB is going to give up some of the gains. News about loss of consumer confidence and the deteriorating (bursting bubble) housing market don't help.