Inter Pipeline Fund continues to support a hold

Jun 17th, 2013 – Comment

In retrospect the call to hold the units on February 22, 2013 was correct.


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Hello Lou.

Could I have your thoughts once again on Inter Pipeline; please and thanks.

Irene in Kelowna BC

 

Hey Irene,

Thanks for the assignment. This will be the fourth time that I have conducted a study of Inter Pipeline Fund (IPL.UN TSX) since October of 2011. The last investigation was posted on February 22, 2013. The units were trading at $23.18 and Robert was concerned because he felt the company had been taking a beating. The research conducted on Robert’s behalf indicated that the units had pulled back from resistance at $24.00 but in the final analysis it was advised that it would be best to continue to hold his position.

Another run at that the charts will provide an updated snapshot of the opportunities and risks associated with IPL.UN

 

The three- year chart depicts a generous uptrend that started in March of 2009 when the units were trading at $7.41 generating capital gains and distributions for over four years. At the moment the units have broken below the 50-day moving average and are testing support along the 200-day moving average. On June 3, 2013 management announced that it would begin a $340 million restructuring that would clear the way for the conversion of the fund into a corporation. The company has $2.7 billion in new pipeline projects in development which will move bitumen from the Alberta oil sands for their clients.

 

 

 

 

 

The six-month chart details the advance to the 52- week high of $24.47 on April 18, 2013. In retrospect the call to hold the units on February 22, 2013 was correct. At this point in time the units are meeting resistance along the 50-day moving average and there are no strong signals being generated by the MACD or the RSI. The units produce a yield of 4.796% and have tested support along the 200-day moving average a number of times since 2009 and for that reason I continue to see IPL.UN as a hold with this added advice – increase your surveillance to ensure that the units hold support at $23.00 and can move through resistance at $24.00 and  start a new advance.

 

Make it a profitable day and happy capitalism!

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