SWIR

[dwest718]

An update.  Fell through 2 support levels but 2 solid support levels around 11.50 and 50% retracement level at just below the hammer today.  Check out the charts.  11.50 level is key... could bounce off of the retracement level today but I'm not sure about the volume.

Look to buy back on any bounce off of the retracement level with some volume or if it falls to 11.50.

[dwest718]

Just keep an eye on this one... very strong reaction to subpar guidance dropped this thing but could be one to get into again.  Just take a look.  I'll try to post a chart later.

[nullzero]

Wow wish I had shorted this the other day closed down -21% and during the trading range today it was down over -30%.

[dwest718]

Wow wish I had shorted this the other day closed down -21% and during the trading range today it was down over -30%.

If you had shorted $1000 worth yesterday afternoon and covered this morning at 11.50, you could have then gone long and made around 40% in less than 24 hrs 

I am going to hold all of my shares... I'm not sure whether I would try to buy more if I could.  If you are considering getting in, just be careful.  Only about 10% more to go before extremely strong resistance... and I don't know how share price is going to react tomorrow anyway after such a crazy day today.  Almost 9m shares traded today... 15 times the average volume.  Anyways here are the charts I promised.

EDIT:  Everywhere I say tomorrow... I mean Monday.  Tomorrow as in next trading day .

[nullzero]

Yeah who knows where it will go monday. Im not going to touch it long or short it can go either way. Might make a nice day trade though if your trading on the flow... possibly a quick 3% gain would be easy if timed right.

[Terliso]

BUSINESS SUMMARY   
Sierra Wireless, Inc. engages in the development and marketing of wireless communications products that provide mobile professionals with data and voice access to wide area wireless networks. Its products include wide-area modems for mobile computers; wireless PC cards; embedded modules for original equipment manufacturers (OEMs); and rugged vehicle-mounted modems. The company's products permit users to access wireless data and voice communications networks using laptop computers, handheld mobile computing devices, or vehicle-based systems. Its products are primarily used by businesses and government organizations to enable their employees to access a range of applications, including the Internet, e-mail, corporate intranet, remote databases, and computer aided dispatch. In addition, the company offers professional services to OEM customers, including wireless design and integration to provide built-in wireless connectivity for notebook computers and other portable computing devices. The company sells its products through indirect channels, including wireless operators, resellers, and OEMs worldwide. Sierra Wireless was incorporated in 1993 and is headquartered in Richmond, Canada.


SWIR is down on heavy volume, I think it is a good short
Target on this bearish pattern is @ $9.00 bucks

[nullzero]

Nice I considered shorting SWIR but I think the morning will be volatile from shorts covering and day traders going long. I may take a look at it if it decides a trending direction. Also I suppose how monday plays out my guess would be a down day for the markets but you can never tell anymore with the volatility and randomness of the markets.

[dwest718]

A few quick things that I wanted to hear your opinion on.
1) SWIR dropped AH on Thursday.  It was not down today at all.  It was up more than 5%premarket after an awful AH session yesterday, opened at .02 above the low, dropped those .02 and was was up 11% from that point on occasionally making moves up to 13.00 a share (13%).  Investor sentiment is very high... read the yahoo message board and you will see.  Most stocks that have crap earnings or negative performance will see a dramatic shift in investor sentiment.  SWIR did not at all.  In fact more people bought this morning and said they were considering buying more than I have seen in a long time.

2) I don't see where you are getting the bottom bold, blue trend line... but that is just me.  I am not familiar with many patterns... I can recognize some flags, pennants, and triangles but that is about it so you probably have me there  .  Could you please explain some of the patterns you use 

3) I have been long on SWIR for around 16 months now.  Throughout those 16 months, SWIR followed short term technical trends and indicators a handful of times.  More often than not SWIR reacts to "long term" support and resistance levels.

4) You seem to be all about trend lines but you are missing one very key one in this case.  If you look on the 1 year chart, you can connect the bottoms and form an ascending trendline.  This trendline runs right under the low for today.  SWIR hit this 11.40-11.45 mark and shot upwards today and never looked back.  I will attempt to post the chart as soon as I can.

These are more supposed to be questions than statements.  I can definitely see where the short opportunity comes into play here.  Any shorting must be done short term and will not amount to more than 15-18%.  I do not think that SWIR will drop below 10.60 and there is absolutely no way it will fall below 10.00.

Can you please explain your strategy for shorting SWIR?  I am mainly interested in the length of time you expect this drop to occur.  If you plan to short for more than a week, I think there could be some trouble.  If you plan to short for only a day (Monday or Tuesday) I think you could make a bit of money.  I think that SWIR will go up to 14.00 on Monday but close around 13.50.  This will show that the resistance is too strong, people will sell for their 20% profit, and people who are short will make a few hundred dollars as it falls back to the high 11s to mid 12s.

[dwest718]

And a few long term weekly charts...

[Melf Elf]

Shorting SWIR the two days prior to earnings in the low 17s or high 16s at the DOUBLE failure at the neckline and at the down trendline would have been sweet.

Shorting here is "shorting into the hole," meaning that too much of the gain on the short side has been missed, and that there's a lot of risk now on the upside, on a re-test of broken support:

1. 13.88 - the June 13 gap-filling low

2. 15.10 - the secondary low of the Symmetrical Triangle (blue #3)

3. 15.38 - the bottom of the broken Symmetrical Triangle

Re-tests of broken support after a stock tanks this badly are not uncommon.  Examples:

1. The rally from the June 13 low of 13.88, back above the neckline, and just below the Right Shouder, to 18.25 (31.48% rally)

2. The rally off the July 24 low (blue #3) back to DOUBLE resistance (14.17% rally...not huge, but still a nice gain)

From the DOUBLE failure at 17.24, SWIR already is down 27.18% at Friday's 12.70 close.

From the gap below the Symmetrical Triangle, SWIR is down 17.10% at Friday's close.

If SWIR should rally to the broken support at the bottom of the broken Symmetrical Triangle, which is not inconceivable, that's a risk of 20% on a short here.

When shorting, I'd suggest trying to enter at a break of support (that wasn't possible on Friday's gap down), or at a re-test of broken support or at resistance, like near the DOUBLE failure above $17 on Wednesday or Thursday.

Just a suggestion.

[basonista]

Shorting SWIR the two days prior to earnings in the low 17s or high 16s at the DOUBLE failure at the neckline and at the down trendline would have been sweet.

Shorting here is "shorting into the hole," meaning that too much of the gain on the short side has been missed, and that there's a lot of risk now on the upside, on a re-test of broken support:

1. 13.88 - the June 13 gap-filling low

2. 15.10 - the secondary low of the Symmetrical Triangle (blue #3)

3. 15.38 - the bottom of the broken Symmetrical Triangle

Re-tests of broken support after a stock tanks this badly are not uncommon.  Examples:

1. The rally from the June 13 low of 13.88, back above the neckline, and just below the Right Shouder, to 18.25 (31.48% rally)

2. The rally off the July 24 low (blue #3) back to DOUBLE resistance (14.17% rally...not huge, but still a nice gain)

From the DOUBLE failure at 17.24, SWIR already is down 27.18% at Friday's 12.70 close.

From the gap below the Symmetrical Triangle, SWIR is down 17.10% at Friday's close.

If SWIR should rally to the broken support at the bottom of the broken Symmetrical Triangle, which is not inconceivable, that's a risk of 20% on a short here.

When shorting, I'd suggest trying to enter at a break of support (that wasn't possible on Friday's gap down), or at a re-test of broken support or at resistance, like near the DOUBLE failure above $17 on Wednesday or Thursday.

Just a suggestion.

Great analysis as always, Melf!  Applause!  One question on the head and shoulders pattern.  You have "no left shoulder" on your chart but couldn't you consider using that group to the right of your comment as the left shoulder?  If not, what specifications would prevent it from being used as a shoulder?  Thanks!  I never stop learning from you, Melf!

[Melf Elf]

One question on the head and shoulders pattern.  You have "no left shoulder" on your chart but couldn't you consider using that group to the right of your comment as the left shoulder?  If not, what specifications would prevent it from being used as a shoulder?  Thanks!  I never stop learning from you, Melf!

basonista,

No, the candles to the right, after the neckline begins at the April 21 gap up, are the lead-in to the Head of the pattern.  There should be a shoulder to the left, but there isn't one because of the gap higher.

It's a very unorthodox H&S Top, to say the least, and we don't know if it's valid until later on.  There were 3 things that validated the pattern:

1. The rally off the June 13 low of 13.88 went back above the neckline, which made the validity of the pattern suspect, but that rally ended at 18.25, below the high (18.45) pf tje Right Shoulder, indicating that the pattern was being respected (the high of the Right Shoulder shouldn't have been taken out, and it wasn't).

The pattern still was suspect, though.  It would have been better validation if the rally had ended at the neckline.

2. The rally off the July 21 low (blue #3) got slightly above the blue down trendline, but it penetrated that down trendline only to end smack on the neckline, on July 27.

Very nice validation, that the neckline now was, indeed, resistance.

3. July 28, SWIR gapped down to 11.45 at the open, and the H&S Top target of 11.85 was MADE.

Back-to-back validations on July 27 and July 28, confirming the vaildity of the unorthodox H&S Top.

SWIR seems to like unorthodox/usual H&S Top patterns.  I'll show you another one next post.

[Melf Elf]

basonista,

From November, 2005 - March, 2006, SWIR formed a H&S Top (red circles).  Within that pattern was nested another H&S Top (blue circles), although that one was very unorthodox.  The high of the Left Shoulder was 14.00.  The high of the Head was only 13.99.  The high of the Head, as you know, should be the highest point of the pattern.  It wasn't.

Otherwise, it sure looked like a nested H&S Top.  "If it walks like a duck...quacks like a duck..."

 

Like NTRI, ESLR and GIGM (mentioned in those folders), when the high of a Right Shoulder is taken out to the upside, you want to be very careful.  It could be a Bull Trap (it was in ESLR), but it also could be very explosive rally to the upside, like it was in GIGM, NTRI and SWIR.

The 12.12 high of the Right Shouder (the red one) was taken out to the upside on April 6.

Shorts Beware. 

The 12.78 high of the Right Shoulder (the blue one) ALSO was taken out on April 6.

Shorts BEWARE.   

The 14.00 high of the entire pattern was taken out on April 20.  Uh-oh-h...

SHORTS BEWARE.     

The next day, April 21...

BANG TO THE UPSIDE.      

The 17.31 target MADE that day (the high was 18.22), no doubt fueled by some panicked short-covering by those who still were playing it for a Bearish H&S Top.

SWIR went on to the high of 21.36.

To derive the target, by the way, subtract the 14.00 high from where the neckline was when the high was put it (it was at 11.69), and ADD that difference to the 14.00 high, rather than subtracting that amount if the H&S pattern had broken to the downside.

Math:

14.00 - 10.69 = 3.31 points added to 14.00 = Target: 17.31 IN PLAY

[Terliso]

No, no, no...I won't pick it up SWIR on monday

You see, the high of the last candle (weekly chart) is @ $17.24 low is $11.45 if this thing goes up @ 13.90 to 14.20 I will short it between that level..

Breaking the 50sma, 200sma, & 200ema on the weekly chart is a BAD indication, SWIR will come down further I believe

[Terliso]

SWIR