Friday, August 26, 2005

Thinking fast; Mindspeed (MSPD)

I bought MSPD last week (August 18) at 1,67
I really liked the chart; Big white candle on high volume followed by a consolidation period on declining volume, followed by another white candle. (more on this pattern later on)

Wednesday MSPD reached a high of 1,92 on volume above average. At the end of the day it went back down to 1,76 however, closing below the short time resistance of 1,81. The volume wasn't as high as the previous times, so this all was a good sign of fading momentum. Yesterday the stock again rose quit a bit, closing near the high of the day at 1,95. It was on lower volume however than the day before, and declining volume in an uptrend is not a good sign. With the stock reaching the 200MA resistance and oversold territory I don't feel confident, and decided to get out with a profit while I can.
Remember: "When in doubt, stay out"

Here's the chart:

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