Rogers Sugar Inc. pulling back ahead of Q4 results

Oct 29th, 2012 – Comment

Currently it appears that the stock is about to test support along the 50-day moving average with the RSI and MACD both still indicating that more selling should be expected.


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I own RSI and wonder why the price has increased (Except for the few days before dividend payment)
Do you have an answer?

Margaret

 

Hey Margaret,

Thanks for the assignment. Rogers Sugar Inc. (RSI TSX) is the largest refined sugar distributor in Canada. They own cane refineries in Montreal and Vancouver, a sugar beet factory in Taber, Alberta, and a distribution and blending centre in Toronto. Your enquiry is an interesting one and highlights some of the advantages of honing your skills when using technical analysis. The move up that you were asking about started on September 17, 2012 on a series of technical signals the were ahead of news that broke on September 28, 2012. As all good hunters know if you watch for signs along the trail you can better position yourself for an opportunity.

A review of the charts will provide greater insight as to what was moving the shares higher.

 

The three-year chart illustrates the buy and sell signals generated by the MACD and the RSI in 2012. Investors who want to reduce risk and generate profits need to gain mastery of these tools and others in the technical analysis job box. Also worth noting is that all along the advance the stock has found support along its moving averages which indicates that investors have been willing to step up and buy when the shares pulled back.

The news that broke on September 28, 2012 was the ruling by the Canadian International Trade Tribunal that reinstated anti-dumping and countervailing duties on refined sugar imports from the European Union. The duties will remain in force until 2015. The MACD and RSI were indicating that a trade was setting up before the fundamental story was revealed.

 

 

 

 

 

 

 

The six-month chart provides a close-up of the sell signal generated by the momentum indicators in August when the shares hit resistance at $6.40 then pulled back to $6.00. The buy signal generated in September at $6.10 was ahead of the news and set up an advance to $6.60. Currently it appears that the stock is about to test support along the 50-day moving average with the RSI and MACD both indicating that more selling should be expected. The company will report Q4 results on November 21 and it is advised to put that date on your action calendar.

In summary the stock was moving higher on technical buying from investors who took advantage of the tools they had mastered.

 

Make it a profitable day and happy capitalism!

 

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