Cogent (COGT)

Company

cogt(2-1)_1yr
COGT 1-year chart

"Cogent is a global biometric identification solutions provider to governments, law enforcement agencies, and commercial enterprises. Cogent provides the highest quality identification systems, products and services with leading technology, accuracy and speed. Cogent's Automated Fingerprint/Palmprint Identification Systems, or AFIS, enable customers to capture fingerprint and palm print images electronically, encode prints into searchable files, and accurately compare a set of fingerprints/palm prints to a database containing potentially millions of prints in seconds." (company website)

cogt(2-1)
COGT 6-month chart

Buy

There was a big sell-off after the February earnings that missed Expectations by 2¢. A couple of weeks later, however, all was forgiven and shares surged again, breaking above both moving averages. Although there have been significant up and down moves, a symmetrical triangle is forming. Given the recent earnings that beat Expectations by 1¢, I am hoping prices will get another boost. However, triangles can be tricky; stocks nearing the point of a triangle tend to break one way or the other. I will have to protect myself in case of a breakdown.

  • Percentage price oscillator (PPO) — changed direction at the end of April and recently crossed above the signal line.
  • Volume — stabilized after the big sell-off.

Based on technical analysis, MarketEdge calls COGT a "neutral" in a "weak downward trend," but notes "mildly improving conditions."

Sell

gain Bottom line
-12%

COGT is a perfect example of the promise and the peril of the symmetrical arrow chart formation: as the point of the triangle gets closer, it becomes more likely that the stock will break one way or the other, and the direction of the break is unpredictable. Yesterday COGT fell out of the triangle and the plunge continued again today.