Neptune Technologies and Bioressources Inc. trying to breakout from a downtrend

Jan 12th, 2015 – 1 Comment

The next flex point for the stock will come on January 13, 2015 after the close of trading when NTB reports Q3 results.


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Hi Lou

I loved your articles. Can you please give me your thoughts on NTB. I bought it in October of 2014 at $1.80 with the thought thatI would sell around the 3.40 range. The Quebec plant was destroyed by an explosion in 2012 where 3 employees died and a dozen or more injured. A plant expansion ramped back up in November, 2014. My problem is I have been hearing so many positive thoughts on NTB and a forecast target of $8.25 over the next year. My practice is when I buy a non-dividend stock I set a price target that I want to make and I usually sell it if and when it reaches it. This one I am having second thoughts on because of what I am hearing. Hope you can give me some insight on this one just wondering if I really should give it another 8 to 12 months.

Thank you
Rick

 

Hey Rick

Thanks for the assignment and your kind words. Both are greatly appreciated.

Neptune Technologies and Bioressources Inc. (NTB TSX) develops marine based omega-3 phospholipids for the nutraceutical and pharmaceutical industries. The company estimates that the wholesale omega-3 market will grow to $4.1 billion by 2018 from $2.1 billion in 2012.

I am glad to see that you have a strategy of harvesting profits when available. High target prices and positive news releases can add some fuel to a stock moving higher. However you should keep in mind that its never as good as it seems and its never as bad as it seems.

In this case lets not get distracted by the excitement of what could happen and focus on what is happening. I can’t tell you what to expect over the next year but I can outline the the trend, support, and resistance that could influence the direction of your holdings.

An inspection of the charts will add greater depth to your evaluation of the potential for NTB.

 

 

NTB

The three-year chart outlines a number of patterns in play with this stock. The first thing that jumps out is the established downtrend the started in August of 2013 when the shares were trading near $4.25. What also needs acknowledgement is the death cross that surfaced in March of 2014. In addition the resistance along the 200-day moving average that has been in play since June of 2014 would need to be overcome if NTB is going to start a new leg up.

There have been plenty of trading opportunities with several signals generated by the MACD and RSI.  Notice the sell indicated at the start of the decline in August of 2013. The buy signal in October of 2014 produced a nice return until the run stalled at $2.40 as it met resistance along the 200-day moving average.

 

 

 

 

 

 

NTB2

The six-month chart provides a close up of the advance that started in October as the momentum indicators signalled a buy. The resistance along the 200-day moving average is the next obstacle that needs to be overcome if we are to see a reversal of the established downtrend. The next flex point for the stock will come on January 13, 2015 after the close of trading when NTB reports Q3 results.  There is not much longer to wait to see if this stock has enough gas in the tank to break above $2.35. It also tells me that NTB has a lot of work to do if its to reach the $8.25 target you cited.

Make it a profitable day and happy capitalism!

Categories: Pharmaceuticals
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