I’d like your outlook on TCK-B. It has come back before from a huge downturn (to $2 in the last recession) but I am wondering if your charts indicate that it can recover again.
I always enjoy reading your analyses on the G&M website and find them very helpful for a more complete persepctive.
Thanks for the assignment and your kind words. They are both very much appreciated! This will be the fifth time since 2010 that I investigate the scenario at Teck Resources Ltd.(TCK.B TSX). The last was on July 6, 2012 on a request from Ed. The shares were trading for $32.96 and Ed was looking for my comments. The stock had been selling off since January of 2011 when a double top pattern surfaced near $65.00 informing investors that sellers were on the cusp of taking control of the market. The decline was long lived and produced a sustained downtrend line.
Every attempt to move higher met resistance along the 50 and 200-day moving averages. The stock had established a ledge of support near $30.00 and the momentum indicators were pointing to a retest of support. The evidence at hand did not support a buy and retrospectively that was the right call. TCK.B broke below $30.00 and touched $24.00 by September of 2012.
Another run at the charts will form the basis of my outlook for the stock.
The three-year chart pretty much tells the plight of investors who have been holding on since 2012. There is the established downtrend line that goes back to 2011. There has also been sustained resistance along the 200-day moving average and a series of lower highs and lower lows. In short a punishing decline.
The six-month chart provides a close-up of the resistance along the 200-day moving average and the selling that overcame the stock starting in May. At the moment the RSI is signalling that the shares have become just slightly oversold. In addition the MACD is bending lower which could lead to a retest of support at $10.00.
In the last report published in 2012 it was advised that companies like TCK.B are driven by global growth that increases demand for metals and materials. Unfortunately the last three years has not provided the conditions needed to move this stock higher.
The trend is your friend until it ends and right now the trend is down. Until we get better visibility as to a trend reversal to the upside you would be best advised to monitor the stock for trading opportunities like the one that surfaced in January of 2015. It was a short burst of profitability in a scorching desert of losses.
Next time I will inspect the charts of Magna International Inc. (MG TSX) on a request from Mario.
Make it a profitable day and happy capitalism!