What do you think of Dorel? It is now above the 50 day moving average. It is recommended by pundits but the low dollar might hurt it.
Thanks for the assignment. This will be the second time that I inspect the charts for Dorel Industries Inc. (DII.B TSX). The last time was on April 25, 2014 when the shares were trading for $39.31 and offering a dividend that produced a yield of 3.37%. Herb wanted my opinion and the research conducted on his behalf identified a stock that had breached an established uptrend line in May of 2013.
What had emerged since the breach was a range bound pattern with support at $36.00 and resistance at $41.00. It was noted that a new up leg had started in April of 2014 and that it was advised that there appeared to be more gas in the tank but with the caveat that resistance at $41.00 had to be respected. Retrospectively that was the right call.
Another probe of the charts will inform my thoughts on this manufacturer.
The three-year chart indicates that DII.B has been somewhat volatile since the last analysis. The retreat that started in June of 2014 took the shares to a 52-week low of $31.98 where the stock caught a bounce to a 52-week high by the early part of January, 2015. Since then 2015 has been disappointing for investors as the shares have pulled back to support at $32.00 and found resistance along the 200-day moving average.
The six-month chart depicts the death cross that formed in late April and the resistance that comes in along the 200-day moving average near $35.50. The bounce off support at $32.00 in late August appears to have more in it but again we have to recognize the overhead resistance. Its going to take a sustained effort to start a reversal of the downtrend.
DII.B reports in U.S. dollars which will effect sales. The company reported that 54% of sales are in the United States so 46% of sales are exposed to foreign exchange risk. At this point the best outcome would be a trade to $35.50.
Next time I will study the charts for Torc Oil and Gas Ltd. (TOG TSX) for Lori.
Make it a profitable day and happy capitalism!