I picked this stock on December 8 as Stock of the Week because of its $2.36 share price. Since then the stock lifted to just below $2.60 on January 10 (around 10% gain so well done if you bought at the lower price levels) before tracing back to finish at $2.31 on close of market last Friday. This is why I have picked the stock again
Telecom New Zealand Ltd [TEL.NZ] is a good stock to trade rather than hold long term (see chart below for comparison with NZX50 gross index) simply because the trading volume is consistently the highest on the NZX so a good stock to make a quick buck on.
I am not a chart man myself or a short term trader but if you look at the one year chart above there has been a good deal of money to be made in the earlier part of 2009, going from around 10c per share right up to 60c per share profit.
The share price reached an 10 month low of NZ$2.31 Friday and has traded like a roller coaster (hence the trade possibilities) from a year low reached in mid January 2009, so one could assume that indicators are showing that an opportunity exits for a good trade at these stock price levels and a good range for profit made considering its recent trading history.
Please beware though, although I am picking this stock today to give traders a heads up (seasoned traders of course will already know about this opportunity) given the present volatility in global stockmarkets and the negative attitude to stocks at present the patient bargain hunters could well get this stock at a lower price than $2.31 but having said that, it is close to its all time low of around $2.25 reached December 2008. (see chart below)
I don't like the long-term prospects for the company, it still has a defensive, reactive culture with employees who are badly trained and informed on what they are selling and poor service levels but it has a 10% plus gross dividend and it isn't going to go out of business any time soon.
Shorties will win here.
Good luck!
Telecom @ Share Investor
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Don;t forget that TEL also trades on the NYSE as NZT, and that in USD terms the stock is not at an all time low.
ReplyDeleteThese dual listed stocks in volatile currencies make it hard to do technical analysis. But looks like a falling knife.
Indeed it does trade in the US. What is its current price?
ReplyDeleteFalling knife? You think it is due for a trip below its $2.25 low? That is of course possible and even I would be interested closer to 2 bucks.
News out this Friday on profit wont be good so another opportunity could exist there.
http://finviz.com/quote.ashx?t=NZT&ty=c&ta=0&p=m
ReplyDeleteCurrently $7.96 and a low of $5.07
I have no idea where it will go. As I mentioned, doing Technical analysis itself is an art not a science, but then doing it on a second derivative (due to NZD fluctuations) is even worse.
The NZT chart is not something I would be trying to catch a bottom on, as it looks like I would be trying to catch a falling knife. I value my hands too much.
The TEL chart, you should at least wait to see if it forms a double bottom on higher volume. It does not look like anyone is accumulating this one.
I have got to say and I aint a chart man(fundamentals and bad news are driving this stock down) If you look at this share over the year it has broken out of its "comfortable" trading range of between the mid to lower 2 buck level up to the $2.50 and above and could test that $2.25 level before Friday depending on DOW action this week and their poor result indicated earlier this week and coming out Friday.
ReplyDeleteTime to be patient.