DHX Media Ltd. to retest support near $7.40

Sep 12th, 2016 – 1 Comment

Broke up and through the downtrend line and the moving averages since June


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DHX.B LOGO

Good Morning Lou,

Please keep DHX.B on your list to explore.

Thanks,

George

 

Hey George,

Thanks for the assignment. I last analyzed DHX Media Inc. ( DHX.B TSX) on March 20, 2013 for Mark. The shares were trading for $2.71 and he wanted my thoughts on the stock. At the time DHX was a microcap with a PE of 68 which had run hard from $0.73 in December of 2011. The research indicated that the shares had run far and fast and had not built much support along the way. It was advised to watch for the quarterly results in May.

The shares did pull back to $2.49 in April but from there DHX continued to climb to near $10.50 by November of 2015. Since then the stock has been operating under a downtrend line that took the shares down to a 52-week low of $5.98 in June of 2016.

A probe of the charts will inform my analysis.

 

DHX.B

The three- year chart indicates that the shares found support near $6.00 in June of 2016 and caught a bounce that has lifted the shares up and through the established downtrend line as well as the 50 and 200-day moving averages. The MACD and the RSI both generated buy signals ahead of the new leg up that took the shares to near $8.00 by August.

 

 

 

 

DHX.B 2

The six-month chart depicts a stock hitting resistance near $7.80 and holding support near $7.60. The MACD and the RSI are both pointing to continued selling pressure which would take the stock to a retest of support near $7.40. I would advise a cautious approach until we get a better sense of the health of this up leg. The PE is currently 27.67, the market cap is in the range of $1.01 billion, and the dividend yield is 0.86%.

Next time I’ll re-examine the case for Ceapro Inc. ( CZO TSXV) on a taunt from Jennifer.

 

 

Make it a profitable day and happy capitalism!

 

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