Data Group Income Fund is in a severe sell off

Oct 28th, 2011 – Comment

The yield on distributions is now at 21.1% which for a microcap company is indicative of the risk you have to assume if you are going to continue to hold these units.


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Hi Lou

Here is my situation.
I invested into DGI.UN both in a RRSP account and a regular investing account.
I purchased shares at the beginning of 2010. The shares went up but now they are
below what the original purchase was. The Dividend in the RRSP account gets reinvested.
This seems to help my share value however in my other account, I have not invested any more.

In your opinion, is this stock worth holding onto?

Thanks,

Mike

 

 

Hi Mike,

Anna from Montreal asked about Data Group Income Fund (DGI.UN TSX) on June 10, 2011. The units were trading for $5.82 at that time and the yield on the distributions was 11.2%.  What was noted in the analysis was that the units were in a gentle down trend and that the indicators were suggesting continued selling. Take a look at that post as part of your investment review.

Unfortunately the selling did continue and your question is how best to proceed. A survey of the charts will provide some guidance as to a go forward plan.

 

 

The three year chart indicates that what had been a gentle downtrend became a rout in July when the units could not hold on to support at $5.00. There is now an established downtrend and a death cross on the chart. These are signals that it’s time to seriously consider taking your loss and getting to your next trade.

 

 

 

The six month chart illustrates the resistance that the shares have met along the 50 day moving average on several attempts to move higher. The bounce off of the rock bottom at $2.39 stalled out at $3.75 on the last test of resistance. The MACD and the RSI are currently flat at best with no indication of direction.

In the June 10, 2011 post there were signs that the units were beginning to weaken. The yield on distributions is now at 21.1% which for a microcap company is indicative of the risk you have to assume if you are going to continue to hold these units. 

 

Make it a profitable day and happy capitalism!

 

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