TeleCommunication Systems Inc (TSYS)

Company

"TeleCommunication Systems, Inc. (TCS) is a leading provider of mission-critical wireless data solutions to government customers, public safety, and carriers. TCS produces wireless data communications technology solutions that require proven high levels of reliability. TCS' wireless data offerings include secure deployable communication systems and engineered satellite-based services; location-based wireless and VoIP Enhanced 9-1-1 services; messaging and location service infrastructure for wireless operators; and commercial location applications, like traffic and navigation, using the precise location of a wireless device." (company website)

tsys(3-1)
TSYS 4-month chart
tsys(3-1)_1yr
TSYS 1-year chart

Buy

They say the devil is in the details. Sometimes it's in the discrepancies. When TSYS announced earnings at the end of July, they missed Expectations by 6¢. Did the stock plunge? No, the disappointing earnings report was followed by 4 days of higher prices on high volume. It may be that the Market was encouraged by news the next week that in the first half of 2009, TSYS text-messaging volume was higher than all of 2008. TSYS is a key player in this market, which is simply exploding.

Since that peak in early August, the price has dropped back down to and below the moving 50-day average, but the average continues to slope up and to the right. Depending on how you look at the chart, there is either a symmetrical triangle or an ascending triangle taking shape, either of which would be a bullish sign. Also, after bumping along on top of the signal line for a couple of weeks, the PPO has started to turn up a bit. For almost two months, the price has been cycling between the 50- and 200-day moving averages, and the Bollinger bands are closing in. Something should break pretty soon.

A worrisome sign in the picture is the steadily decreasing daily volume of shares traded.

  • Percentage price oscillator (PPO) — just beginning to diverge above the signal line
  • Volume — in an overall decline, but the higher volume days are almost all up-days.

Based on technical analysis, MarketEdge calls TSYS a "strong buy" in a "weak upward trend."

Sell

gain Bottom line
7%

After five consecutive up-days, TSYS ran out of steam. Despite a promising start today, a sell-off began and I decided to jump before my stop-loss order kicked in to preserve as much of the gain as possible.