Bombardier Inc. signals a short term buy not a long term buy

Dec 15th, 2010 – Comment

There isn’t much in the data stream that would suggest that the company is on the verge of a business breakthrough that will get it on a sustained 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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Lou,
What do you think of BBD.B I see lost of buy recommends, but all I have seen of late is this stock loosing value, any thoughts?

Thanks,

Brad

Hi Brad,

I last posted on Bombardier Inc. ( BBD.B TSX) for Dan on October 16, 2009. He wanted to know if he should book profits or continue to hold. At the time I suggested that he would be best served taking some money off the table. The stock continued to run until April of 2010 when it gave back most of its advance. BBD.B is not a buy and hold stock and has not been one since the 1990′s. You have to trade this one for income. Lets consult the charts for a better sense of trend, support, and resistance.

The three year chart indicates that the stock is currently range bound with support at $4.50 and resistance at $5.00. The  shares have cycled through the range three times since June of 2010.

The six month charts illustrates that the MACD has proven a good indicator of momentum. In September a buy signal emerged that foreshadowed an $0.80 move to the upside for a 18.6% return. By mid October the MACD generated a sell signal at the high of $5.30. From there the stock retreated to $4.60.

Currently the MACD looks to be about to move higher suggesting a buy.

I think that there is a trade here that could make you a few bucks to the resistance point at $5.00. But you will need to be fleet of foot to avoid letting your profits slip away. There isn’t much in the data stream that would suggest that the company is on the verge of a business breakthrough that will get it on a sustained uptrend.

Happy Capitalism!

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