Teck came up today in The Globe and Mail. Technical analyst says stay away until things look like they have solidly turned around. Consider it a tax loss for this year is his advice...

I read with interest your negative assessment of Teck of August. But why should I ignore its 9.8% dividend, $ 1.3 billion cash hoard and 0.28% price-to-book-value ratio?

Andrzej

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Hey Andrzej,

Thanks for the assignment. This will be the seventh time since 2010 that I examine the charts for Teck Resources Ltd. The last time was on a request from Bill when the shares were trading for $9.15. He was concerned about the company’s future and analysis revealed that investors should not expect a trend reversal for a number of different reasons.

The highlights included an established downtrend line, resistance along the 200-day moving average, and failure to hold support at $10. It was advised that TCK.B could retest support at $7. In retrospect, that was the right call.

Your question cited what you perceived as a negative evaluation of the stock back in August. I do my best to call ‘em as I see ‘em. I have no vested interest in the outcome other than doing the best I can to get the direction right. As far as the fundamental factors you cited are concerned, it’s just noise you have to filter out. What benefit could you hope to derive from them when the stock is down 28.73 per cent in just 41 days. That’s one bad haircut.

I often advise that the risk in bottom fishing is anticipating the bottom instead of confirming it. The best time to buy a stock is when its going up.

Another probe of the charts will identify how best to approach TCK.B.

The three-year chart illustrates the patterns that investors need to acknowledge if they are considering these shares for an investment. There is the established downtrend, a death cross, resistance along the moving averages, a series of lower highs and lower lows, and the inability to hold onto support at various prices. All this evidence points to the fact that sellers are, and have been, in control of the market.

The six-month chart depicts the break below support at $7 and the sell signals generated by the MACD and the RSI in mid-September. At this point I would suggest putting TCK.B on your list of candidates for a tax loss sales before the end of the year.

Make it a profitable day and happy capitalism!

http://www.theglobeandmail.com/globe-investor/investment-ideas/teck-resources-ltd-continues-to-destroy-shareholder-value/article26560156/