Cenveo (CVO)

Company

CVO 1-year chart CVO 1-year chart

"Cenveo, headquartered in Stamford, Connecticut, is a leader in the management and distribution of print and related product offerings. The Company provides its customers with low-cost solutions within its core businesses of commercial printing and packaging, envelope, form, and label manufacturing, and publisher services; offering one-stop solutions from design through fulfillment. With over 10,000 employees worldwide, Cenveo delivers everyday for its customers through a network of production, fulfillment, content management, and distribution facilities across the globe." (company website)

CVO 6-month chart
CVO 6-month chart

Buy

19-May-08. Cenveo reversed a long, steep downtrend in April and has been showing strong improvement since. In early May CVO released earnings, beating Expectations handily (-.06 vs -.10 Expected), and on a non-GAAP basis earned .15 per share, attributing much of its improvement to the effect of acqusitions starting to pay off.

  • Price momentum (PPO) — sharply increasing
  • Relative strength (RSI) — above 50 for the first time in many months, and rising
  • Trend (ADX) — buying pressure (+DI) has just crossed above selling pressure (-DI)
  • Volume — big volume after earnings report

Based on technical analysis, MarketEdge calls CVO an "early buy" showing "strong improvement."

Sell

gain Bottom line
-16%

1-Jul-08. This could not have gone more wrong! What I thought was just a normal dip back to the 1-month average — then back to the 50-day moving average — then back to the lower Bollinger band — turned out to be the proverbial slippery slope. Today I bailed before the close at a new 52-week low on the third consecutive day of higher-than-normal down volumes.

Looking back, it's obvious I should have paid more attention to the weakening indicators rather than explain them away as normal after a pullback. That is normal after a pullback, but I failed to confirm that the pullback was over, and it cost me dearly.