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Apr 28th, 2010 – Comment

At this point you are best to trade the range until WIN breaks through the resistance at $3.10 and returns to an uptrend.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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wi-lan

Hi Lou:

Wondered what you thought about Wi-Lan at this current level – they seem to have a good business model.

Thanks,

Tom

 

Hi Tom,

Wi-Lan (WIN TSX) has either created or harvested 800 patents on different elements of  wireless communications systems such as 3G, Wi Fi, WiMax, Bluetooth, and others.  Since 2006 they have built their business around collecting royalities on their patents and in some cases litigating to protect those patents. In 2009 they spent over $20M in legal expenses to get companies using their intellectual property to sign license agreements. The stock has had a good run but right now its taking a breather.

win

The three year chart provides a view of the advance from the late 2008 lows and the resistance that has come in at the $3.10 range.  A golden cross formed in May of 2009 at the $2.00 level and the RSI signaled an overbought situation in late 2009 and early 2010.

The other pattern that is worth noting is that WIN has repeatedly tested support on the 50 day moving average and bounced off it suggesting that investor confidence is such that they are willing to buy on pull backs.

 

WIN2

The six month chart tells the story of the recent price action in the shares of WIN. Over the last 5 months the stock has been range bound with support at $2.70 and resistance at $3.10 cycling through the range twice in 2010 generating a 14.7% return from trough to peak.

At this point you are best to trade the range until WIN breaks through the resistance at $3.10 and returns to an uptrend.

 

Happy Capitalism!

Categories: Telecommunications
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