Openwave Systems (OPWV)

Company

"Openwave Systems Inc. is the leading independent provider of software solutions that ignite mobility for the communications and media industries. Openwave empowers its customers to rapidly transform their business by sparking new revenue streams and market opportunities, building loyal subscriber communities and reducing operational costs. Openwave's broad range of IP-based handset-to-network solutions enable the rapid launch of information, communication and entertainment services across networks and devices and include handset software, content delivery, adaptive messaging, location, music and video services." (company website)

OPWV 3-month stock chart

Buy

Since hitting bottom in July, Openwave has been bumping along just under the $10 level (see sidebar). In the past three months, however, the chart has improved considerably. The Bollinger bands are gradually moving upward, and there is a pattern of rising lows for the dips (dotted green line above). The stock dipped briefly after reporting earnings, but has recovered and is currently back above the 50-day moving average.

  • Price momentum (PPO) — just at neutral, but clearly picking up
  • Trend (ADX) — really weak, with buying pressure (+DI) and selling pressure (-DI) nearly equal for the past month
  • Money flow (CMF) — back up to neutral after a strong outflow
  • Relative strength (RSI) — at neutral, but strengthening over three months
  • Volume — steep drop in daily volume has leveled off

Based on technical analysis, MarketEdge calls OPWV a "strong buy" in a "weak upward trend." As I look at the chart I think "weak upward" is really giving the benefit of the doubt, but I've been wrong many times before.

Sell

gain Bottom line
0%

Even today, MarketEdge still calls OPWV a "strong buy," but it traded low enough to trigger my stop-loss order, the activation price of which had risen to just over my purchase price. Trading costs eat up all but 2¢ of my "profit."

I don't feel at all bad about getting out of OPWV. I don't much like stocks with long tails on the candlesticks (intra-day volatility), and while there's evidence of a triangle forming, OPWV is still going essentially sidewise. There must be a better way to make 2¢.