Synodon Inc. in a steep sell off

Mar 6th, 2015 – Comment

The six-month chart isn’t providing much in the way of evidence that would indicate a trend reversal.


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SYD LOGO

Lou

Can you give me your opinion on Synodon. It trades on the venture.

Thanks,

Brian

 

Hey Brian,

Thanks for the assignment. Synodon Inc. (SYD TSXV) has developed and commercialized some applications related to  their realSens technology. The technology allows for remote monitoring of gases at ground level. Some of the applications include collecting data on hydrocarbon leaks, pollution monitoring, greenhouse gas emission inventories, and other applications. The data collection can be done by overhead aircraft or from ground stations. There are patents pending in the United States, Canada, and Europe.

The company will not be selling the technology but offering a survey service to clients that need to stay on top of leaks and emissions from pipelines, storage facilities, and process plants. This is an early stage company that has generated over $17 million in losses as it has moved towards its objectives. The market capitalization of SYD is only $11.39 million which  makes this a higher risk investment and should be allocated to the speculative portion of your portfolio.

An investigation of the charts will provide the basis of my opinion.

 

 

SYD

The three-year chart represents a stock that has been in a steep decline since March of 2014 when it traded at a 52-week high of $0.475. The MACD and the RSI both generated sell signals as the shares came off the high. What is also visible on the chart is an established downtrend which has resisted all efforts to sustain a move higher. A death cross formed in September of 2014 and by the end of the month the stock broke below support at $0.225. It is also worth mentioning the resistance along the 50 and 200-day moving averages which has plagued the stock over the course of the decline.

 

 

 

 

 

 

 

 

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The six-month chart isn’t providing much in the way of evidence that would indicate a trend reversal. The downtrend is in place, the moving averages are providing resistance, and the momentum indicators are not signalling a buy. In 2015 SYD has been holding support at $0.13 but that isn’t enough to motivate a buy.

Next time I will examine the case for Toronto Dominion Bank (TD TSX) for Tbone.

Make it a profitable day and happy capitalism!

 

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