Alliance Grain Traders Inc. has not found a bottom

Feb 17th, 2012 – Comment

The best case scenario would be a final capitulation that washes out the last of the sellers.


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Hey Lou,
Your opinion on AGT would be greatly appreciated.
Is the bottom near???
Thanks,
Peter

 

Hey Peter,

 

Thanks for the assignment. Alliance Grain Traders Inc. (AGT TSX) is one of the largest lentil and pea splitting companies in the world. They also deal in beans and chickpeas through their 29 facilities located near growing areas in Canada and around the world. Sadly the charts are not very pretty and at this point in time it doesn’t look like we have found a bottom.

A review of the charts will provide more depth to the analysis to support your decisions.

 

 

 

The three-year chart paints a picture of a stock that has been selling off since February of 2010. All the along the downtrend the shares have been making a series of lower highs and lower lows. In addition a death cross surfaced in August of 2010 that brought another level of concern into focus. It is also worth mentioning that every level of support has been breached . Finally the gap down that emerged the week of February 13, 2012 is not giving me a sense that AGT is ready to reverse the selling pressure.

 

 

 

The six-month chart is not giving me that warm and fuzzy feeling that says buy. The RSI indicates that the stock is oversold and could be ready to turn but we are not there yet. The MACD is still in a steep dive with no indication that it is time to put capital at risk. What is also worth noting is the inability to overcome resistance along the 50-day moving average.

 

If you like the story put AGT on your watch list but be patient. Anticipating a bottom can lead to new lows with your money. Confirm the bottom to take some of the risk off the table. The next flex point for the stock comes on March 24, 2012  when the company is expected to report Q4 results. The best case scenario would be a final capitulation that washes out the last of the sellers. If it came in the form of double bottom it would be even better.

 

Make it a profitable day and happy capitalism!

Categories: Agriculture
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