Student Transportation of America Ltd is in an established downtrend.

Oct 26th, 2011 – Comment

If you are only attracted to the 9.3% dividend yield you could be setting yourself up for a capital loss.


About the Author

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.


Read the author's full profile.


Further Research

Read more about Transportation.


Lou,

What is your opinion about STB for the next 12 month period?

Fred

 

Hey Fred,

This will be the third time I have run the charts for Student Transportation of America Ltd. (STB TSX) since the first post on March 15, 2010 for John. In that analysis when the stock was trading at $4.85 it was advised that there was more gas left in the tank. The stock ran to $6.75 by January 2011 for a  39% gain,

 On May 09, 2011 Ben was looking for an opinion on STB and it was advised that the advance had stalled and it wasn’t a good time to board the bus. The shares retreated from $6.64 to $6.02 for a 9.3% haircut. It could have been worse. The stock  hit a 52 week low of $5.12 on October 04, 2011.

A review of the charts will provide some guidance to the risks and opportunities available with STB.

 

 

The three year chart is another example of an advance that has turned into a retreat.There is an established downtrend and a death cross has formed. These two patterns alone are enough for me to bring all the cars into the pits until the track is cleared of all debris.

 

 

 

 

The six month chart indicates the support that came in at $5.5o as investors who watch the indicators took advantage of the opportunity. On October 04, 2011 the MACD and RSI both indicated that the stock was oversold and that the momentum was shifting towards buying.

What is also evident on the chart is that there is now resistance along the downtrend line and the 50 day moving average. In addition the RSI and MACD are both turning lower. Finally volume is thinning out on the October advance.

The only way that you want to get on this ride is if you are willing to trade it. If you are only attracted to the 9.3% dividend yield you could be setting yourself up for a capital loss.

Make it a profitable day and happy capitalism!

 

 

 

Categories: Transportation
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media