Neo Material Technologies on an uptrend

Feb 9th, 2011 – Comment

At this point I don’t think it breaks below the trend line but rather tests it as it has over the last 6 months


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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

I have been following NEO  for about three years and averaging my way up. Any thought for the next year?

Thanks

Steve

Waterloo, Ontario

Hi Steve,

I last posted on Neo Material Technologies Inc. (NEM TSX) on October 14, 2009 for Lalit. At that time the stock was trading at $3.91 and in less than a year and a half the stock has more than doubled. Love when that happens. The charts will provide a better view of the prospects for the stock.

The three year chart illustrates the advance that began in July of 2010 as NEM moved off support at $3.50 to the close on February the 8, 2011 at $8.60.  Nice when that happens. The one concern that I have with the chart is that there is a fairly wide gap between the price of the stock and the 200 day moving average suggesting that in the short term NEM has moved a bit fast. The recent  concerns about global supplies of Rare Earth Metals and China warning it might cut back exports has lit the fire under this kettle.

The six month chart depicts the advance that began in July of 2010 and has steadily continued. The uptrend line has not been broken and there is a golden cross that formed in late September.

At this point I don’t see any major signals that suggest that NEM could reverse the trend. However that doesn’t mean that you should put your stock certificates in a drawer and forget about them.

The MACD and RSI both seem to be in the process of  signaling  a pullback. At this point I don’t think it breaks below the trend line but rather tests it as it has over the last 6 months. Having said that lets remember that you need to monitor your holdings daily. From that surveillance you can make better and more timely decisions.

Happy Capitalism!

 

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