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Manulife: Be very cautious
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Lou Schizas

This article was published more than 13 years ago. Some information may no longer be current.

Manulife Financial president and CEO Don Guloien, left, speaks to chief financial officer Michael Bell at the firm's annual general meeting for shareholders in TorontoReuters

Hi Lou,

You last opined on MFC at the end of April. The last four months have been highly active. Would you be kind enough to offer your most recent insights? I use charts for selection and timing, thus I find your column to be quite instructive.



Kind regards,



Tom







Hi Tom,



Thanks for the assignment. It brings up a good point that is worth discussing. When you own a stock, as I always tell my students at Sheridan College, it's like your pet, your kitty, your puppy, your fishy. Take care of it!



Check on how it's doing on a daily basis, look at the trend and chart patterns, read the news about the company and the industry it operates in. There are no bad stocks, just bad stock owners who put their money into a company then rarely look at it. There is an old saying in the capital markets: If you ignore your money, it will go away! Let's spend some time with Manulife Financial Corp. and see how its doing since its last check up.





On April 30 when I posted a response for David on the prospects of catching a ride on MFC, there were caution flags noted that proved that you need to confirm the bottom, not anticipate it. The stock couldn't hold support at $17.50 and melted like the Wicked Witch of The West in the Wizard of Oz.



In the April 30 post, the flex point was identified as the May 6 quarterly reporting date that should have been on shareholder calendars. I always look at a flex point as a coin with two sides -- risk one one side and opportunity on the other. When you know that a material piece of information is due to be released, it's not to be ignored.









The six month chart isn't providing much encouragement at this point. Yes, the stock has moved higher but the RSI indicated that MFC had been oversold. That brought the bargain hunters out as the selling frenzy eased, but look at the trend line and the resistance along it.







I think we need to be very cautious with MFC. The story is one of less-than-stellar performance and reduced dividends. The best time to buy a stock is when it's going up!



Happy Capitalism!

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