Calian Technologies is for a special breed of trader

Hi Lou,

Was looking at Calian Technologies for some moderate growth and a steady dividend. Wondering what your take on this company is?

Thanks,

Matt

Hey Matt,

Thanks for the assignment. Calian Technologies Ltd. is a small-cap professional services company that operates in a number of areas including information technology, health care services, contract manufacturing, and systems integration. The stock is thinly traded with average daily volume over the last three months of 4,921 shares. CTY has a healthy history of paying and increasing dividends. The dividend was increased to $0.28 in August and the current yield is 5.6 per cent. The company only has one analyst following their case and the news stream is fairly sparse.

A review of the charts will provide additional insight as to how best to proceed with CTY.

The three-year chart indicates that the shares had a good run but then met resistance in the $21.00 range. The failure to get over the hurdle has brought on some selling that has the stock about to retest support along the 200–day moving average. Worth making note of is the double bottom in the fall of 2011 when the shares caught a bounce off $16.50 and setting the stage for the march to $21.00. Finally the uptrend that started in late December of 2011 was breached in May of 2012, flattening the advance and giving rise to the current retreat.

The six-month chart depicts the selling that surfaced in the middle of September. The MACD generated a buy signal in June at $19.40 and a sell signal in September at $21.00. If you can overcome the fact that CTY is a small-cap company that is thinly traded, has one analyst following its progress and doesn't generate much interest because of scant news, then you might want to look for an entry point once the current selling has abated.

As mentioned many times over the years it is better to confirm the bottom than to anticipate it. Keep an eye on the MACD and see if it generates a buy signal. Currently it appears to be beginning to turn higher.

Make it a profitable day and happy capitalism!

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