Hi Lou,
Could you do a synopsis of Teck Resources. I realize that the copper and metallurgical coal markets are in the dumps, but the company's future ?
Appreciate your input.
Many thanks.
Bill
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Hey Bill,
Thanks for the assignment. This will be sixth time since 2010 that I analyze the charts for Teck Resources Ltd. (TCK.B TSX). The last time was on July 3, 2015 when the shares were trading for $12.05. Cheryl wanted my point of view and if the technical signals were pointing to an eventual recovery. The dominant features that the research uncovered were not supporting a decision to buy the stock in anticipation of a trend reversal.
There was an established downtrend, sustained resistance along the 200-day moving average, and a series of lower highs and lower lows. All of which gave rise to the conclusion that TCK.B would likely retest support at $10.00. In retrospect that was the right call. The stock has continued to punish investors as they travel through a hostile environment for commodity producers. In terms of a forecast as to the viability of the company, my skills, unfortunately, are not suited to that task.
An updated inspection of the charts will help identify if there are indications of a trend reversal in the near term.
The three-year chart indicates that TCK.B could not hold support at $10.00 and is now trying to maintain support near $9.00. If this level fails we could retest $7.00. The established downtrend, resistance along the 200-day moving average and the series of lower highs and lower lows identified in the previous analysis are still weighing on the stock.
The six-month chart highlights the very modest move off the 52-week low of $8.77 that was reached in late July. The base building near $9.00 does not provide sufficient evidence that we should expect a trend reversal or a trade at this time. TCK.B is caught in the vortex of a spiralling decline in commodity prices which has caused much pain and suffering. As I have said many times bottom fishing can become the golden dream that becomes the silver hook.
At this time I would look elsewhere for opportunities.
The next time I will probe the charts for Home Capital Group Inc. (HCG TSX) for Andy.
Make it a profitable day and happy capitalism!
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