Savanna Energy Services Corp. trading in a range bound pattern

Nov 5th, 2012 – Comment

SVY is not a buy and hold stock.Trade it for profits until it breaks out of the range into a sustained uptrend.


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Could I have your input on SVY. The book value is about $10 and trading at $6.77 while paying a dividend close to 5%.
Thanks a lot,

John

 

Hey John,

Thanks for the assignment. Savanna Energy Services Corp. (SVY TSX) operates in Canada, the United States, Mexico, and Australia. They operate a fleet of 100+ drilling rigs, and 100+ well service rigs. In addition they offer their exploration and production clients access to other oilfield equipment that they might require. The company has worked with Aboriginal communities in Western Canada partnering on ownership of the equipment inventory. The current dividend yield on the stock is 5.3% which has to be taken under consideration in making your final decision. Q3 results released on November the 5, 2012 outlined weakness in Canada that took demand lower and resulted in a decline in revenue, and margins, despite growth in the United States and Australia.

A review of the charts will add some depth to the analysis and help you decide how best to manage the opportunities and risks associated with your shares in SVY.

 

 

The three-year chart depicts a stock that has been moving sideways in a range bound pattern with support at $6.80 and resistance at $8.00 through which it as oscillated six times in the last year. For active and informed traders you can’t ask for anything more than the opportunity to trade for 17% multiples times over the course of a year.

 

 

 

 

 

 

The six-month chart provides a better view of the range within which the stock has been trading. The MACD and the RSI have both provided great buy and sell signals over the period. If you examine the buy indicated in early September and the sell in early October you would have enjoyed an advance and avoided a retreat. Currently it appears that it would be prudent to wait for a buy signal from the momentum indicators before getting back in.

 

SVY is not a buy and hold stock.Trade it for profits until it breaks out of the range into a sustained uptrend.

 

Make it a profitable day and happy capitalism!

Categories: Oilfield Services
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