Please analyze Norbord. This stock has been continuously on a seesaw of late.
Thanks for the assignment. This will be the third time that I scout out the details for Norbord Inc. (NBD TSX) since January 16, 2013. The last was on August 23, 2013 on a request from Wilson. He had bought shares at $33.00 and was wondering if it was a good time to buy more as they were trading at $27.05. The research conducted on his behalf indicated that there was not sufficient evidence to suggest that the selling had abated and that he should re-consider his notion to buy.
Retrospectively that was the right call. NBD continued to retreat to a 52-week low at $25.10 before buyers took control of the market and sent the shares higher. Another inspection of the charts will better inform my analysis.
The three-year chart portrays a stock that has been trading in a range with resistance at $35.00 and support at $27.50. A dividend yield of 7.76% might imply that investors are being well paid for the bumpy ride. The next flex point for the stock will come on the release of Q4 results on January 30, 2014. Make sure to have the date in your calendar.
The six-month chart represents an advance off the August lows that had been quite generous but has pulled back as we came into the new year. Currently the shares are testing support along the 50-day moving average and along $31.00. If $31.00 fails to hold we may see a retest of support along the 200-day moving average and $30.00. The MACD and the RSI both generated sell signals in late December and are not indicating a reversal at this time.
NBD is a play on the health of the housing markets in North America and Europe. Nobel Prize winner Robert Shiller recently suggested that the housing market in the United States is somewhat fragile and could be setting itself up for another bubble. He also added that how the U.S. Federal Reserve proceeds with tapering of its easing program will also have an effect on housing.
From my prospective NBD looks like it will oscillate in the range of $27.50 to $35.00 until we get better clarity.
Make it a profitable day and happy capitalism!