A strong rally this fall in Research in Motion Ltd. has begun to falter in recent sessions, bringing the stock precariously close to breaking key support levels that could usher in fresh rounds of weakness, according to a new technical analysis.
The report from National Bank Financial comes just ahead of Canada's tech darling releasing its latest quarterly earnings after the close today. A disappointing report could put the support levels in particular jeopardy.
While the recent rally saw the stock breaking above its declining 200-day moving average, it failed to break its declining trend line that has been in force for the last 18 months, said analyst Dennis Mark.
The stock has already fallen below its 200-day moving average in Canada and is precariously close to breaking this line on Nasdaq. "It will be important for RIMM to hold above its 200-day line at $58.54 (U.S). Failing to hold above its 200-day will indicate the stock is rolling over," he said.
Mr. Mark believes that key chart support at $58 (U.S.) to $60 has high probabilities of failing.
He warns that breaking the next support at $55 (U.S.) will be another confirmation that the rally has failed.
George Weston Ltd. remains "armed with dough" even after declaring the special $1-billion dividend this week, said National Bank Financial analyst Jim Durran. Mr. Durran said the dividend wasn't a total surprise given a lack of compelling large-scale acquisition opportunities and the company's reluctance to overpay for them.
Upside: Mr. Durran maintained his "outperform" rating and $88 price target.
Agnico-Eagle Mines Ltd. expects gold and silver recoveries for its Pinos Altos project in Mexico to come in lower than forecast and costs have also increased, noted TD Newcrest analyst Creg Barnes. As a result, Mr. Barnes reduced his net present value estimate for the project by 20 per cent.
Downside: Mr. Barnes cut his 12-month target price by $3 (U.S.) to $77 and maintained a "hold" recommendation.
Cangene Corp. needs to diversify away from its lacklustre-performing legacy biodefense contracts before it lands on a stronger, more sustainable footing, said TD Newcrest analyst Lennox Gibbs.
Downside: Mr. Gibbs cut his 12-month target price by $1.50 to $4. While maintaining a "buy" rating, he added that he is "growing increasingly wary regarding Cangene's continued dependence on choppy, unpredictable biodefense revenue streams."
Schnitzer Steel Industries Inc. is enjoying strong industry fundamentals and has a business model that can generate substantial earnings and operating cash show during industry upswings, said Canaccord Genuity analyst Eric Prouty. The metals recycler holds highly strategic assets that cannot be replicated and has compelling long-term growth drivers, he added.
Upside: Mr. Prouty upgraded his price target by $13 (U.S.) to $80.
HudBay Minerals Inc. highlighted several interesting targets as its revealed its exploration plans to analysts this week, said TD Newcrest analyst Greg Barnes. While facing a flat production profile for the next couple of years, it has a rich exploration pipeline that has the potential to generate investor interest if recent successes at its Lalor and Reed Lake projects in Manitoba can be built upon, he said.
Upside: Mr. Barnes has a $20 target price on the stock.