Atlantic Power Corp. not a buy and hold stock

Apr 20th, 2016 – 1 Comment

Trade this one for profit


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Utilities.


ATLANTIC POWER CORPORATION LOGO

Hello,

I have held Atlantic Power for many years and have collected just over $9,000.00 in dividends but i am down just over $14,000.00 in capital. Recently it has climbed to $3.30 and my cost is $4.79..do you see it reaching that high?

Thanks for any thoughts,

Dave

 

Hey Dave,

Thanks for the assignment. This will be the fifth time since 2012 that I have taken a snapshot of Atlantic Power Corp.(ATP TSX). The last time was on March 14, 2016 when the shares were trading for $2.80 and offered a dividend yield of 4.29%. Bob was interested in the stock because of an upswing and his belief that its debt had been reduced.

The research indicated that ATP had a rocky trading pattern that offered little for the buy and hold investor. The move higher that caught Bob’s attention came after the company released its Q4 and fiscal year results. It was noted that the MACD and the RSI had generated buy signals ahead of the announcement. What also surfaced from the analysis was that the stock was meeting resistance along the 200-day moving average.

The conclusion based on the evidence at hand was that ATP was not a buy at that moment.By March 17  the stock pulled back to $2.67 before starting a new leg up.

Another run at the charts will help identify how best to proceed with your investment.

 

 

ATP

The three-year chart highlights the resistance that has been encountered near $3.40 as the shares moved up and through the 200-day moving average on March 21, 2016. From here there is further resistance at $3.80 and then at $4.00.

The advance that started in early March when the shares were trading near $2.30 has been quite generous.The question that remains is if ATP can reach your break even point of $4.79?

 

 

ATP2

The six-month chart pulls focus on the testing of resistance near $3.40 and the support near $3.10. The MACD and the RSI are indicating that we could expect selling pressure to continue.

In terms of ATP reaching $4.79 I would say that you will have to be patient as the stock has a lot of work to do to get there. The best approach in managing this rocky trader is to establish a trading position. Buy and hold has not been the right a approach

 

Next time I will investigate the situation concerning Berkshire Hathaway Inc. ( BRK.B NYSE) for Andrew.

Make it a profitable day and happy capitalism!

 

 

 

Categories: Utilities
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media