Wajax Corporation has broken the downtrend

Sep 4th, 2013 – Comment

Currently the momentum indicators are suggesting that there is more to the advance.


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WJX LOGO

 

Any thoughts on WJX ?  I am over 60, and a dividend investor with some patience.

Phil

 

Hey Phil,

 

This will be the second time that I investigate the case for Wajax Corporation (WJX TSX). The last occasion was on October 19, 2011 on a request from Andrew. The shares were trading for $32.12 and the dividend yield was 6.7%. Andrew wanted to know if the stock would be a good choice to add to a portfolio. The research conducted on his behalf indicated that the stock had been selling off since May of 2011 and had established a downtrend with resistance along the 50-day moving average. The stock had caught a bounce in early October after a steep and sudden drop and the question that remained to be answered was if there was more to the bounce.

It was advised to put the stock on his watch list in anticipation of the release of Q3 2011 results in November of 2011 which could better define if a new sustained uptrend was setting up. As things developed the stock established a new advance after the Q3 results beat the street. The shares continued to run to an all time high of $51.15 on May 28, 2012 but that was as good as it got.

Another study of the charts will help inform my thoughts on WJX.

 

 

 

 

 

 

 

WJX

The three- year chart illustrates the retreat that has plagued the shares of WJX since May of last year. The stock retreated all the way back to its 52-week low of $29.38 on June 25,  2013 where it caught a bounce. Currently the advance has met resistance along the 200-day moving average and the question we need answered is if there is enough buying to keep moving the price higher.

 

 

 

 

 

WJX2

The six-month chart depicts the resistance that has been in play along the 200-day moving average since July. The MACD and the RSI both generated a buy signal in June as the stock bounced off the 52-week low. Currently the momentum indicators are suggesting that there is more to the advance.

As a dividend investor with patience you might want to start taking advantage of the trading opportunities presented by WJX.  Alternatively you can hold the shares and enjoy your 6.645% yield.

 

Make it a profitable day and happy capitalism!

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