Energy Recovery (ERII)

Company

"Energy Recovery, Inc. designs and develops energy recovery devices that help make desalination affordable by significantly reducing energy consumption. Energy Recovery's PX Pressure Exchangerä (PXä) device is a rotary positive displacement pump that recovers energy from the high pressure reject stream of seawater reverse osmosis systems at up to 98 percent efficiency. The company is headquartered in the San Francisco Bay Area with offices in key desalination centers worldwide, including Madrid, Shanghai, Florida and the United Arab Emirates." (company website)


ERII 4-month chart
erii(1-1)

ERII 1-year chart
erii(1-1)_1yr

Buy

25 March 2010. Bought 500 at $6.40.

ERII has been in a long downtrend, but appears to have turned the corner last August. The 50-day moving average had begun to rise but started to fall again in February. ERII is, however, trading back above the moving averages, and a roughly symmetrical triangle is forming in the chart.

  • Percentage price oscillator (PPO) — just broke above the signal line
  • Volume — sell-off after earnings, but since then volume has stabilized

Based on technical analysis, MarketEdge calls ERII a "avoid" in a "weak downward trend." I don't see it that way. We'll see who's right.

Sell

gain Bottom line
-2%

6 April 2010. Sold 500 at $6.30.

After watching ERII for almost two weeks now, I decided to bail out. Although it is bouncing back from the 50-day moving average, there doesn't seem to be much momentum there. I'll put my money into something more promising.