An employee pulls out a live lobster from the holding tank at the Clearwater Seafoods store on the Bedford Highway in Halifax in this file photo taken onNovember 12, 2007.Paul Darrow/For The Globe and Mail
Hi Lou,
I'm a Herring-choker looking for your opinion on Clearwater Seafoods. Always appreciate your insight!
Cheers,
George
Hey George,
Thanks for the assignment and your kind words! Always appreciated!
This will be the second time that I interpret the patterns concerning Clearwater Seafoods Inc. The last time was on Jan, 13, 2013, when the shares were trading for $4.85. Mario wanted me to have a look at the stock and the research indicated that the shares were overbought and that we could expect a pullback. The shares were coming off a 52-week high at $5.30 and the MACD and the RSI were signalling a sell.
Retrospectively that was the right call as CLR pulled back to $4.00 by the beginning of February 2013. By June of 2013 the shares started a new leg up, breaking above resistance at $4.50. Another exploration of the charts will help inform my opinion of this investment opportunity.
The three-year chart outlines the healthy advance that drove the shares to a 52-week high of $9.21 by February of 2014. The retreat has tested support along the 200-day moving average where it caught a bounce. What is evident is that the bounce has met resistance near $8.20 which has to be overcome if we expect to see another leg up. In addition, make note of the breach of the uptrend line.
The six-month chart illustrates the top in February and the sell signals generated by the MACD and RSI as the shares retreated to support along the 200-day moving average near $7.00. The bounce took us to $8.20 where resistance is preventing further gains. At the time of this post I would advise that you take a trading posture with CLR. Find entry and exit points until certain issues are resolved.
What we need to see is a sustained advance. The resistance along $8.20 needs to be overcome with conviction and the leg up that came off the test of the 200-day moving average has to be extended. Watch the momentum indicators for buy and sell signals.
Make it a profitable day and happy capitalism!
Have your own question for Lou? Send it in to lou@happycapitalism.com.
Lou Schizas