Sandvine Corporation needs to confirm a bottom at $2.70

Sep 24th, 2014 – 1 Comment

What is also observable from the RSI is that SVC is oversold which could attract buyers as we look for support at or near $2.70 to hold.


About the Author

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.


Read the author's full profile.


Further Research

Read more about Telecommunications.

See also , .


 

SVC LOGO

Hi Lou,

I am watching SVC-T.

It has fallen since an earnings alert several weeks ago.  Fundamentally I believe in the business, but would like your perspective on where it might bottom technically, and therefore what a good entry point may be for a 12-18 month hold.

Stan

 

Hey Stan,

 

Thanks for the assignment. has developed technology that allows telecommunications carriers to inspect the data packets flowing through their networks. The information tells the carrier whether a packet is associated with voice communications, social media, texting, or video streaming. The ability to identify what is travelling through their space could allow carriers to better manage big users such as

In 2011 Netflix accounted for 13.5% of peak evening downstream traffic in Canada. In a report released on September 18, 2014 SVC reported that the peak evening hour downstream traffic attributable to NFLX had grown to 30-40%. In Canada no other service accounts for more than 1% of traffic providing opportunities for competing offers.  North American “cord cutters”, those who have cut off their cable TV accounts, are responsible for 54% of total monthly network traffic as they view 100 hours of video over thirty days.

An inspection of the charts will help address if we can confirm a bottom on SVC.

 

SVC

The three-year chart indicates that there as been a breach of the uptrend that started in January of 2013. In addition the shares have broken below support along the 50 and 200-day moving averages. None of these patterns contribute to a strong buy recommendation. Also worth noting is that the MACD and the RSI are signalling that sellers are currently in control of the market. Finally there is a ledge of support at $2.70 that could bring buyers back into the market.

 

 

 

 

 

 

SVC2

The six-month chart puts a spotlight on the second leg of the downtrend that started in April. The MACD and the RSI both generated sell signals as the shares hit resistance at $4.00. The close-up also illustrates that the shares are on the cusp of a bearish crossover which would indicate increased selling pressure to come.

What is also observable from the RSI is that SVC is oversold which could attract buyers as we look for support at or near $2.70 to hold.  If we can confirm the bottom at $2.70 then we could see the beginning of a trend reversal. The next flex point we know with certainly is the release of Q3 results in October. Watch how the stock trades as we approach the release date.

Make it a profitable day and happy capitalism!

 

 

Make it a profitable day and happy capitalism!

 

Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media