Sierra Wireless Inc. aggressively selling off

Dec 7th, 2015 – 2 Comments

Lots of work needed to reverse the downtrend


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SW LOGO

Hi Lou,

Can I get an analysis of Sierra Wireless from you?

Thanks,

Mirella

 

Hey Mirella,

 

Thanks for the assignment. This will be the second time that I inspect the charts for Sierra Wireless Inc. (SW TSX). The last time was on February 29, 2012 on a request from Peter. The shares were trading for $7.62 and he wanted to know what I thought. The analysis indicated that the shares had broken above the downtrend line that had been in place since January of 2011. In addition the stock was compressing between the 50 and the 200-day moving averages. It was advised to hold the stock until there were more signals to help determine direction.

SW traded down to $6.79 by April of 2012 before it started a massive run that started in January of 2013. The stock ran to a 52-week high of $56.94 in January of 2015 but that was all it had to give. Coming off the high the shares have given up over half their value.

Another examination of the charts will form the basis of my analysis.

 

 

 

SW

The three-year chart depicts a loathsome downtrend that started in early 2015 as the stock topped out at the 52-week high. The MACD and the RSI produced sell signals that saw the shares move below the 50-day moving average by the end of  January. Sellers continued to control the market through May where SW broke below support at $40.00 and the 200-day moving average.

The death cross that formed in June indicated that investors could expect more downward pressure. Which was what transpired as the stock hit a 52-week low of $18.72 in November.

 

 

 

 

SW2The six-month chart highlights the gap down in early November that took the stock from $33.00 to the 52-week low. The catalyst for the sell off was the release of Q3 results that missed expectations and downplayed future prospects. Currently there is not much evidence that we can expect a trend reversal in the near term putting a caution flag on the track.

I would advise keeping your powder dry and if you do decide to jump in watch for resistance along the 50-day moving average.

 

Next time I will investigate the particulars regarding General Motors Corp. (GM NYSE) for Terry.

 

Make it a profitable day and happy capitalism!

Categories: Telecommunications
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