Thursday, March 08, 2007

Lumera (LMRA)

CANSLIM investors should not be buying stocks until we have a follow-through day. In the meantime, I'm looking at some other stocks to trade. I've mentioned that I've been picking at some gold mining stocks, but I also want look at some other possibilities.

Lets take a look at Lumera Corp. (LMRA). This is a stock that was brought to my attention by Ariel, a reader living in Spain. I've had some trouble getting any meaningful information about the companies products. Interestingly, I saw a talk at Northwestern today given by a guy who works in the field that Lumera is making products for. I don't have time to get into it but the guy is a professor at Caltech (Jim Heath) who was the primary grad student researcher who helped discover C60 with Rick Smalley. (you know, buckey balls). Professor Heath now tries to find ways to help identify proteins that are associated with disease.

Lumera is making a machine that would make this process easier and more accessible to non-experts. The company also dabbles in electro-optics that could revolutionize the way companies transfer data among its workers. Basically they make a machine that acts as a high bandwidth wireless LAN.

They reported earnings today and the stock plunged 11% after hours. Their revenue was up but they lost 0.70 cents for the year compared to losing 0.63 cents the year before. Lets look at the chart and see if that is a bad thing.

First of all, notice that the stock broke its downtrend line on higher volume. The stocks then pulled back on lighter volume and tested the trendline breakout point and the 200 day moving average. Tonight the stock plunged down all the way to 3.88 in after hours trading but then pulled back up to 4.05. If it can pull itself back up even further so that it is above the 200 dma then I would be very optimistic about LMRA.

It should be interesting tomorrow. This is a very speculative stock, so be careful.

1 comment:

Anonymous said...

Thanks Paul!