Today NC reported a loss of $51.69 compared to a $6.27. Along with that, they also announced a dividend of $0.5150/share compare to $0.50/share one year ago. The loss is very concerning, but the dividend is very reassuring. The stock rallied 18% on this news. Back on February 6, I recommended keeping a close look on NC when it was trading at $37.75. Since then, NC traded down to the low of $13.66, a possible loss of 63%! This is the main reason why incorporating some simple technical pattern is important. I drew two lines, one at $41 and one at $27. If the stock break below, it is a selling indicator. Unfortunately the stock did broke below $27 and began selling hard with 11 out of 12 down days to the low of $13.66.
My assumption of the market rally was premature, but my discipline prevented me from loosing money and that is most important during a bear market. All indicators turned bearish since then. The XLB and $CRX remains below 50days MA. The $USB remains in an uptrend.
Although NC performance in the past few days were impressive rallying from $13.66 to close today at $21.05 (a whopping 54% rally), I can't get behind this name until a stronger base is formed. The stock was deeply oversold with RSI fell below 20 (anything below 30 is considered oversold) and a strong buying came in on 3/10 and NC traded 136,472 shares compare to the average of 43,700 (25days MA). With that said, I will keep my eyes on NC but my radar has turned toward HJ Heinz (HNZ). More on the analysis soon.
Art
Disclosure: I currently hold HNZ at $34.56 and MO at 14.88
Art
Disclosure: I currently hold HNZ at $34.56 and MO at 14.88
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