Bombardier Inc.

May 4th, 2016 – 1 Comment

Still a couple of cards to play : C-Series orders and Federal $$


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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.


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Hi Lou, Miss you on television! Just wondering your thoughts on BBD.B. Do you see a share consolidation coming? Do they need Fed money or just more orders for the c-series?

Thank-you,

Marian

Hey Marian, Thanks for your support over these many years and this assignment! This will be the ninth time since 2009 that I have examined the charts for Bombardier Inc. (BBD.B TSX). The last time was on February 1, 2016 when the shares were trading for $0.98. Ryan was attracted to the stock because it was trading for under a dollar and he wanted to know if it was a good time to buy? The research indicated that the long decline that started in 2013 was not over and that despite the MACD and the RSI indicating that the stock was oversold there wasn’t sufficient evidence to suggest that the selling was complete. In hind sight that was the correct call as BBD.B touched a 52-week low of $0.72 within a week for an additional 16.32% decline. Another snapshot of the charts will help identify how to proceed with this investment.   BBD.BThe three-year chart depicts the vigorous leg up that started as the stock bounced off the 52-week low. The advance took the shares up and through the downtrend line that dominated 2015. In addition the stock has broken through resistance along the 50 and 200-day moving averages. Make note of the resistance at $2.25 and then again near $2.50.

 

 

 

 

 

 

 

BBD.B2

The six-month chart provides a close-up of the leg up that started in February as the MACD and the RSI generated buy signals in the middle of the month. In April

the stock became overbought on the enthusiasm generated by the announcement of an order from Delta Airlines for 75 C-Series jets.  Stocks that become overbought attract sellers who want to capture attractive profits earned in a short period of time.

There is news circulating that BBD.B is in talks with JetBlue and there is still speculation that the Trudeau Government will buck up to support the company.

In regards to a rollback of the stock. At under $1.00 the probability goes up but at this time I would say no. Regarding the need for Federal money – I would say they need it to get them more sales of the C-Series to get them out of the woods.

I have not been a big fan of BBD.B for a long time based on the downtrend that has been in place. Having said that lets not shoot this running horse just yet.

Next time I will re-examine Intertainment Media Inc. (INT TSXV). for S.

Make it a profitable day and happy capitalism!

Categories: Aerospace
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