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Dear Lou,



Please give me a little information on Data Group Income Fund. Is it safe to hold bearing in mind that the dividend is .65 per annum?



The last quarterly report was OK and the stock went up but now it seems to keep on going down again. Any advice?



Thank you very much. I know your information is always reliable.



Anna in Montreal



Hi Anna,



Data Group Income Fund is in the specialty printing business producing business forms, event tickets and the like. The trust is currently in the process of converting to a dividend paying corporation and estimates that it will have completed the process by late 2011.



Let's examine the charts to see what we can discern from the past and perhaps gain some insight into the future.







The three-year chart paints a picture of units that are trading in a range with a gentle downtrend. The units had a lovely rise from August of 2009 when it traded at $2.25 until April of 2010 when it peaked at $8.50. Since then the units have met resistance every time it has tried to move higher.



The dividend yield at the current payout is 11.2 per cent,. which is very generous and reflects the risk associated with the investment.







The six-month chart outlines the move off the lows of May 2011 when the units hit $5.30 and caught a bounce to $6.50 where overhead resistance stopped the advance. The RSI and the MACD both generated a buy signal at $5.30 and a sell signal at $6.50.



At this point in time it appears that the indicators are suggesting continued selling should be expected. Over the last three months the average daily volume has been 56,469 units. In the last 12 sessions the volume has been below the average. If trust units or shares are going to go up it has to be on better-than-average volume.



DGI.UN is a micro cap company operating in the specialty printing business offering what would have to be seen as a very generous yield. Both of these factors indicate a higher-risk profile.





Happy Capitalism!



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