SunOpta Inc. needs an increase in trading volume

Apr 20th, 2015 – Comment

The MACD and the RSI are both turning lower which would suggest that we might expect SOY to retest support at $13.00.


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SOY LOGO

I have held SunOpta since 2007 through thick and thin. I noticed a recent lower target of $12.41 over the next year. I am very keen on supporting organic foods. Should I stay or is there anything with greater promise?

Malcolm

 

Hey Malcolm,

Thanks for the assignment. SunOpta Inc. (SOY TSX) is positioning itself as a pure play natural and organic food foods company. The organization is in the process of divesting non-core assets and focusing on driving efficiency and effectiveness in its operations. The last part of the corporate strategy is to acquire healthy food assets.

The stock enjoyed a great run that started in January of 2013 when the shares broke above resistance near $6.50. The advance took  the shares to a 52-week high of $16.22 by early November of 2014 but that was as good as it got.

A scout of the charts will identify the patterns that could provide guidance to the direction of the stock going forward.

 

SOY

The three-year chart outlines a number of patterns that are influencing the direction of SOY. The first noticeable feature is the downtrend line that has dominated the chart since November of 2014. The MACD and the RSI both generated sell signals as the shares hit the 52-week high. Efforts to move higher over the last six months have met resistance along the trend line. Also worth mentioning is the death cross that surfaced in early January of 2015.

In March of 2015 the stock bounced off support near $12.00 but the move higher was stopped by mid April as it met resistance along the downtrend line and the 200-day moving average.

Readers should also make note of the thinning volume that may also be contributing to the decline. The average daily volume over the last three months has been 18,578 shares. Over the last seventeen days better than average volume has only be realized on three of those days.

 

 

 

 

 

 

SOY2

The six-month chart highlights the resistance along the 200-day moving average in April. The MACD and the RSI are both turning lower which would suggest that we might expect SOY to retest support at $13.00. You mentioned that you have been holding the stock since 2007 which would intone that you have basically gotten little or no return over eight years. There is nothing presently on the charts that would indicate that you could expect a new leg up to form in the near term. With regards to identifying another investment in the same space I would advise that you should birddog a prospect and send it to me for a second opinion.

 

The next two posts will cover Celgene Corp. (CELG NASDAQ) and St. Jude Medical Inc. (STJ NYSE) for Terry.

 

Make it a profitable day and happy capitalism!

 

 

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