Friday, September 5, 2008

Hi Lou 
Where do you see Bombers price going in the next 12 months, $14 maybe? 
Cam

Hi Cam,

Bombardier, BBD.B TSX, has had a great run off the lows of 2006 when it traded in the $2.50 range. The MACD has provided good signal generation for BBD.B so monitor it for entry and exit points. The RSI clearly showed an overbought situation at the June 2008 highs.

The current pattern has me a bit spooked as it looks like a double top which is a reversal pattern. The sell off today on better than expected Q2 results was driven by concern about the airlines who buy regional jets. The majority of airlines are scrambling to get their business adjusted to higher jet fuel costs and are bleeding red ink. That means that orders for new RJ's are moving to the back burner.

The big overhang on the markets is the concern that global economic growth is slowing and all the worries that come out of that Pandora's Box. I think BBD.B will test support at $6.50 and if that doesn't hold down to $6.00 before it can make a move to $14.

Happy Capitalism!

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