Sauer-Danfoss (SHS)

Company

"Sauer-Danfoss Inc. is a worldwide leader in the design, manufacture, and sale of engineered hydraulic, electric and electronic systems and components for use primarily in applications of mobile equipment. Sauer-Danfoss, with 2009 revenues of approximately $1.2 billion, has sales, manufacturing, and engineering capabilities in Europe, the Americas, and the Asia-Pacific region." (company website)

shs(4-1)
SHS 4-month chart
shs(4-1)_1yr
SHS 1-year chart

Buy

4 December 2009. In September, the SHS 50-day moving average turned up and the stock has been climbing steadily ever since. After recent peaks near $9.50, it pulled back to the average, which marked the beginning of a narrowing of the Bollinger bands. Today it jumped to open, apparently ready to break upward.

At the beginning of November there was a big run-up in price, for no apparent reason, although two weeks later the company produced a nice earnings surprise, narrowing losses significantly from Expectations. At about the same time the 200-day moving average turned up.

  • Percentage price oscillator (PPO) — about to cross above the signal line
  • Volume — 3x volume at the beginning of November

Based on technical analysis, MarketEdge calls SHS a "hold," noting a "mildly deteriorating" chart but also that it is "above resistance."

Sell

gain Bottom line
-2%

11 December 2009. "About to cross" is not the same as "has crossed" — SHS took a big dive yesterday that turned a modest gain into a modest loss and drove the PPO line below the signal line. I bailed out this morning to limit further losses.