Descartes Systems Group Inc. needs to break above resistance at $15.00

May 30th, 2014 – Comment

At the time of this writing the MACD and the RSI are turning lower after the May 29, 2014 release of Q1 2015 results that met street expectations.


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DSG LOGO

Hi Lou,

Would you please have a look at Descartes Systems Group ; It is in a major sell off without any material news – it is now in the red for 2014,is the run over ?

Thanks !

Mario

 

Hey Mario,

Thanks for the assignment. This will be my first examination of the situation at Descartes Systems Group Inc. (DSG TSX). The company is a software developer focused on solutions for logistics intensive businesses. The shares of DSG enjoyed a nice ride over the last sixteen months but the bloom has come off the rose. The stock began to top out as we came into March of 2014.

A scout of the charts will help you identify how best to proceed under current conditions.

 

 

 

DSG

The three-year chart reveals a breach of the uptrend that started in December of 2013. DSG had been range bound through most of 2012 with support at $8.00 and resistance at $9.00. The shares reached a 52-week high of $17.02 by March of 2014 for close to a double on the move bottom to top. The research conducted on your behalf found a recent report by analyst Blair Abernathy from Cantor Fitzgerald Canada where he opined that SAP could take a run at DSG to consolidate the logistics vertical. Nice if it happens but until it does its we have to focus on what the charts are telling us. Currently the stock is in a pullback that has to be respected. The shares have caught a bounce but off the 200-day moving average but there is lots of work that needs to be done to ignite a new up leg.

 

 

 

 

 

 

DSG2

The six-month chart displays the next test for DSG as it approaches the 50-day moving average. We will have to see if the stock can move though resistance near $15.00. At the time of this writing the MACD and the RSI are turning lower after the May 29, 2014 release of Q1 2015 results that met street expectations.

 

If the selling pressure continues support comes in at $14.00, $13.60, $13.00 and then at $12.00. I would be cautious with the new downtrend in place. Its not something to fool with especially if you are sitting on hard earned profits. There are no dividends with these shares so keep in mind you only get paid on gains when you sell.

Make it a profitable day and happy capitalism!

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