Dorel Industries Inc. range bound

Apr 25th, 2014 – Comment

At this juncture there is nothing to suggest that DII.B is about the break out from the established trading range.


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DII.B LOGO

 

Lou,
What is your opinion of Dorel Industries Inc?
Thanks,
Herb

 

Hey Herb,

 

Thanks for the assignment. Dorel Industries Inc. (DII.B TSX) produces and distributes products in three categories juvenile, recreational and leisure, and home furnishings. The company generates $2.4 billion in annual sales, and employs 6,400 staff members operating in twenty five countries. The dividend yield for the common stock is 3.37% and the average daily volume over the last thirty days is 53,553 shares.

An inspection of the charts will identify the trend, support, and resistance that are in play for DII.B.

 

DII.B

The three-year chart portrays a stock that breached its uptrend line in May of 2013 and has been range bound and trading sideways for the last twelve months. What we can identify is that the boundaries for the range are support at $36.00 and resistance at $41.00. The MACD and the RSI have been generating buy and sell signals as the stock has been oscillating between support and resistance. The sell signal in April of 2013 that came in just before the stock hit its 52-week high of $45.05 and the buy signal in July of 2013 ahead of the 52-week low of $31.20 are worth examining.

 

 

 

 

 

 

DII.B2

The six-month chart indicates that the leg up that started at the beginning of April 2014 could have more in it. The MACD and the RSI are not intimating that the buying is about to dry up just yet although it would take a significant effort to break above $41.00 with conviction. The next flex point for the shares will come in May when the company reports its first quarter results.

At this juncture there is nothing to suggest that DII.B is about the break out from the established trading range. If you are interested in this stock you have to identify what exactly has caught your attention. Is it the dividend or the prospects for capital appreciation? The best approach to managing this stock is to collect your dividend and trade it for profit within the range until we get better indications as to direction.

Make it a profitable day and happy capitalism!

 

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