Colabor Group Inc meeting resistance at $8.50

Jan 9th, 2013 – Comment

When you look at the last candle stick on the chart you can see that a hanging man pattern has surfaced which indicates that buyers are losing control of the stock.


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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.


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Hello Lou,

I love you on AM640. Keep up the great work!

Could you please re-visit Colabor Group and give your opinion.

Thank you,

John

 

Hey John,

Thanks for your kind words. These are exciting times at AM640 with Bill Carroll joining the broadcast day as host of the drive home show from 4-7pm.

My last investigation of the Colabor Group Inc. (GCL TSX) was conducted on June 27, 2011 when the shares were trading at $10.12 a share. At the time Paul was attracted to the generous quarterly dividend which was paying $0.26 per share. It was noted that the shares in GCL presented a number of risk factors because of its small market capitalization, thin trading volume, and on the technical side resistance at $10.50 and a death cross that had formed. The result of the study indicated that it would be wise for Paul to be patient and avoid finding new lows with his hard earned capital.

Another run at the charts will provide another layer of information to help guide how best to proceed with this stock.

 

 

The three year chart tells the story of a stock that is not for the faint of heart. What transpired since the last case study was a retreat to the $7.50 range by July of 2011 and a subsequent jump to $10.50 in early 2012 where resistance came in to stall the advance. The big gap down to $6.50 in March of 2012 reflects a cut in the dividend from $0.26/share to $0.18/share. The stock has bounced off the lows and is currently meeting resistance at $8.50.

Clearly you have to trade this for profits but keep in mind that the thin trading that was observed in 2011 continues to be place. Average daily volume over the last 3 months is 39,967 shares with volume surpassing the average in 12 of the last 30 days. Liquidity is an important factor and should not be ignored.

 

 

 

 

The six-month chart  provides a close- up of the resistance that has formed at $8.50. When you look at the last candle stick on the chart you can see that a hanging man pattern has surfaced which indicates that buyers are losing control of the stock. Even though the stock offers a dividend yield of 8.62% I continue to advise caution with this investment given that you don’t want to surrender capital in an effort to earn income.

Make it a profitable day and happy capitalism!

 

 

 

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