New Flyer Industries Inc. pulling back

Aug 29th, 2014 – Comment

The research conducted does not point to a trend reversal at this time.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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NFI LOGO

 

Hi Lou,

Saw your article about Alter NRG Corp. (NRG) on globeinvestor.com. We already own and – and have been trying to add another “green stock” to the mix: . Missed the opportunity to buy it below $12, then below $13 – our limit orders remained unfilled while the stock jumped higher and stayed there. Do you think there’s a chance it will come down? Would hate to miss the opportunity to buy it under $14, but my husband wants to wait and see… :)

Thank you,
Ilona

 

Hey Ilona,

Thanks for the assignment. New Flyer Industries Inc. ( NFI TSX)  manufactures heavy duty buses in the United States and Canada. In June of 2104 the company announced that it would focus on their Xcelsior model as the single platform for heavy duty transit and bus rapid transit. According to management the move to a single platform would drive efficiency while allowing for customization to meet client specifications. The range of power options offered to customers include clean diesel, natural gas, diesel-electric hybrid, electric trolley, and zero emission battery electric.

The company anticipates that bus procurement by transit agencies in North America will return to historical levels through 2015 as fleet replacement plans come into effect. In reading the management discussion and analysis released with the Q2 2014 results I was  fascinated by the push by the U.S. government to increase the “Buy American” content requirement for mass transit. The intent is to reach 100% ” MADE IN THE USA” content over the coming years. I always find it interesting to observe how the animals look at each other when the water supply gets low.

An investigation of the charts will help you identify a potential entry point for this stock.

 

 

NFI

The three-year chart illustrates the uptrend that has created a lot of wealth for the shareholders who got on the ride after the 2011 share consolidation,which saw ten old shares exchanged for one new share. There have been tests of support along the 50 and 200-day moving averages going back to 2012 with no serious breach. There has been a pullback from the 52-week high of $14.08 just a few weeks ago which has provided you with a potential entry point you mentioned as important to your decision

 

 

 

 

 

 

NFI2

The six-month chart highlights the overbought situation that existed in early to mid August as indicated by the RSI. We also had the MACD turning lower and it is now signalling a sell. With the evidence at hand it appears that NFI may retest support at $13.00. The research conducted does not point to a trend reversal at this time. However keep in mind that the trend is your friend until it ends.

 

Make it a profitable day and happy capitalism!

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