Macro Enterprises Inc. moving towards being overbought

Mar 8th, 2013 – Comment

Factors you should consider in your evaluation is that MCR is a micro cap company valued at $49.83 million.


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Could I get your thoughts on Macro Enterprises.
Is the strength going to continue?
Thanks,

Pete

 

Hey Pete,

Thanks for the assignment. This will be the first time that I examine the case for Macro Enterprises Inc. (MCR TSXV) which is a service provider to the energy sector with operation in Northeastern British Columbia and Northwestern Alberta. Factors you should consider in your evaluation is that MCR is a micro cap company valued at $49.83 million. In addition the average daily volume over the last three months is 255, 402 shares. Over the last thirty trading days it has only traded above the average volume on five days. The last big surge came on March 5, 2013 when it traded close to 700,000 shares taking the shares up 18.34% on the release of Q4 results that reported improved earnings. Also worth noting is that the stock trades on the venture exchange which is a higher risk environment than a more senior exchange. Finally I couldn’t find any analyst coverage on the stock which means that it isn’t getting any lift from regular reporting on the company.

A review of the charts will provide the substance of my evaluation of the risks and opportunities associated with MCR.

 

 

The three- year chart tells the tale of a stock that moved up from $0.20 in late 2011 to $0.70 in late 2012 on thin volume. It jumped up significantly on the release of Q3 2012 results which revealed a significant increase in earnings and continued to ratchet higher on Q4 results. The company expects to report higher revenue for Q1, 2013 adding more fuel to the fire.

 

 

 

 

 

The six-month chart is a case of higher highs and higher lows with good support along the uptrend line. I wouldn’t suggest shooting a running horse but I would be cautious with a stock that has run from $0.20 to $2.00 in just over two years on volume that surges on news then thins out. The RSI is moving into overbought territory which generally indicates that we are running out of buyers. Keep an eye on volume and the trend as we approach the May reporting period.

 

Make it a profitable day and happy capitalism.

 

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