From today’s INK Research Morning Report, September 25, 2014
Set for a rebound? Multiple buying at Teck Resources
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Overview: Sentiment and Stocks
Mining stocks are well into correction mode with the S&P/TSX Composite Metals & Mining Index off 12.9% over the past month. Much of the weakness has been driven by a soaring US dollar as traders bet that the Fed's approach to monetary policy will become more restrictive in the months ahead due to a firming economy. We may get a better sense today on how solid the assumption is regarding US economic growth on the back of data for weekly jobless claims and durable goods orders for August.
Regardless of today's economic news, a lot of optimism has already been priced into the greenback. It may be tough for the dollar to keep climbing without some period of consolidation or possibly even correction. That could help stabilize commodity prices at least for the short-term. Moreover, if the US economy is as strong as some believe, industrial mining stocks could eventually see some fundamental support with respect to a pick up in demand for their underlying commodities. On balance, the case for at least a short-term rebound in industrial commodity stocks is growing.
With that in mind, today we highlight insider activity at integrated senior miner Teck Resources (TCK.B). Overall, the stock has a mostly sunny INK Edge outlook thanks to relatively attractive insider and valuation characteristics. While price strength is weak, the recent move may be overdone as the stock's relative strength index (RSI) remained under 30 as of yesterday's close of $22.00. The combination of technically oversold conditions as indicated by the depressed RSI plus insider buying suggests the stock may be set for rebound.
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On September 22nd, Teck Resources director Mayank Mulraj Ashar bought 5,000 shares in the public market at $21.41. On the same day, senior officer Robin Sheremeta bought 1,000 shares at $21.57.
Earlier on September 19, 10% holder Caisse de dépôt et placement du Québec bought 410,700 shares between the prices of $21.94 and $23.11.
