If you want to learn the ups and downs of investing, there is no better place to look than "interface solutions" provider Synaptics (NASDAQ:SYNA).

Up: After the market closes on Jan. 20, Synaptics reports outstanding financial results. Revenue soars 65% over 2004's second quarter, and net income skyrockets 178%. The CFO says, "2005 is shaping up to be an outstanding year based on our record first half performance and current outlook for the second half of the year." The following day, the stock soars 21.8% to close at $36.81 a share.

Up: On Jan. 25, fellow Fool contributor Kelvin Taylor noted the popularity of the Apple (NASDAQ:AAPL) iPod digital music player and that Synaptics' touch-sensitive click-wheel is one of the cool technologies that makes the iPod compelling technology.

Up: On Feb. 4, the stock hits an all-time high of $41.19 a share.

Down: On Feb. 8, Kelvin covers the almost 16% one-day swan dive Synaptics takes after a Bear Stearns analyst cut the price target for the stock and questioned whether Apple's use of a non-Synaptics TrackPad in Apple's news PowerBook notebook computers signaled that Apple would source future "interface solutions" internally. The stock closes at $33.31 a share.

Down: On Feb. 9, the stock trades as high as $32.53 (which is still down 2.3%) before cascading down to close at $25.88 (-22.3%).

Down More: On Feb. 10, Bear Stearns and First Albany downgrade the stock. The stock trades as low as $21.50 (a 16.9% trouncing) before recovering to close at $22.68 (a stinging 12.4% loss).

Up: The stock, at its $25.33 high during today's trading, is up 21%. In an 8-K regulatory filing last night, the company said, "Yesterday Apple announced several new iPods, and we are confirming that our interface solutions are being used in those products."

On the upside: More than 50% of the notebook computers shipped include one or more Synaptic solutions. From a new scrolling solution for the Logitech (NASDAQ:LOGI) cordless notebook computer mouse to the TouchPad interface solution for the Hewlett-Packard (NYSE:HPQ) iPAQ Pocket PC, Synaptics has a strong core set of products.

The future looks bright, too. Cell-phone manufacturers such as Nokia (NYSE:NOK) and Sony (NYSE:SNE) are constantly increasing the functions available in their phones -- and new, simple interfaces are needed to make their products easy to use.

On the downside: The market overreacted to the Apple rumor. But the stock was too high. Consider analyst earnings estimates of $1.12 for this fiscal year and $1.09 next fiscal year (yes, a decrease in earnings is expected!), and you have to wonder why the stock ever traded for 40 times forward earnings.

A conclusion: Analysts have been known to change their opinions and estimates. Synaptics has net cash (cash minus debt) of $103.4 million and strong 21% operating margins -- and the company is a specialist in a growing marketplace. This is a healthy company.

The stock has been greatly discounted on its roller-coaster ride down. With the anticipated bad news not coming, it is the opinion of this observer that an excellent entry point is here for another ride up.

Fool contributor W.D. Crotty does not own stock in any of the companies mentioned. Click here to see The Motley Fool's disclosure policy.