Bombardier Inc. still a trader not a holder

Dec 17th, 2014 – Comment

The MACD and the RSI are not indicating that investors can expect a boost 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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BBD.B LOGO

Hi Lou,

I am your frequent reader.I have high regard of your opinion.

Please give me your take on BBD.B .Do you think that the life support can be removed now?

Thank you so much,

Vince

 

Hey Vince,

Thanks for the assignment, your support and kind words.  They are all very much appreciated! This will be the fifth time that I inspect the charts for Bombardier Inc. (BBD.B TSX). The last occasion was on July 17, 2013 after the Paris Air Show when the shares were trading for $4.91. At the time you were concerned that the market was dead quiet and there was little excitement about the C- Series Jet. The analysis conducted reiterated an earlier assessment that BBD.B was a trading stock not a buy and hold asset. The shares were meeting resistance at $5.00 but had not breached the uptrend line or the 50-day moving average. It was also noted that the MACD and the RSI were pointing to a pullback. The conclusion was that there insufficient evidence to rate a buy.

In retrospect that was the right call. The stock began a decline starting in October of 2013 to below $3.40 by February of 2014. Keep in mind that over the last year and a half  BBD.B has offered a number of profitable trades for investors so inclined.

Another run at the charts will inform my take on this stock.

 

BBD.BThe three-year chart indicates that the downtrend that started in October 2013 came to an end in October of 2014. The double bottom that surfaced in October of 2014 provided investors with a buy signal as it pointed to a trend reversal. The shares ran to resistance at $4.40 and have since pulled back and are testing support near the 50-day moving average. What is also evident are the sell signals generated by the MACD and the RSI in November as the stock became overbought.

 

 

 

 

 

 

BBD2

The six-month chart highlights the overbought condition in November and the pullback to support at $3.90. The MACD and the RSI are not indicating that investors can expect a boost at this time. Once again the charts are supporting the evaluation that you shouldn’t hold BBD.B, you have to trade it when the opportunity presents itself. Pay close attention to the signals and get on and off the ride to generate income.

Make it a profitable day and happy capitalism!

 

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