Ariba (ARBA)

Company

ARBA 1-year chart ARBA 1-year chart

"Ariba, Inc. is the leading provider of spend management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management™ software and services. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com. " (company website)

ARBA 6-month chart
ARBA 6-month chart

Buy

I took advantage of this morning's steep selloff in the market to buy a lot of ARBA. It was already oversold, and the sell-off made this an even better bargain. ARBA got a big boost from its last earnings report and had already consolidated the gain.

  • Price momentum (PPO) — picked up sharply after earnings
  • Trend (ADX) — very strong
  • Money flow (CMF) — basically neutral, although there was a recent strong inflow
  • Relative strength (RSI) — weakened after last peak, but still above neutral
  • Volume — increasing

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

Sell

gain Bottom line
1%

Since I bought ARBA, the stock has taken a turn downward, and MarketEdge now calls it a "short candidate" in a "weak downward trend."

Right now, I think the chart can be interpreted in two ways: (1) ARBA is in a downtrend and is approaching a test of the downtrend line, or (2) ARBA has weathered the storm and is recovering. In favor of the second interpretation, you can point to the successful test of the 200-day moving average and today's cross above the 50-day moving average, plus upturns in the three plotted indicators.

Since I was holding 1000 shares, I decided to hedge my bets: by selling this first lot at essentially break-even, I can lower the average cost of the other two lots (2-Mar and 10-May) to about $9, providing a bit of room to assess which way ARBA is going to go.