There are people in the world so hungry, that God cannot appear to them except in the form of bread. ~Mahatma Gandhi
It's quite a correction that has been going on these last couple of days. However, Breadtalk hasn't been affected too much. As it is on my watchlist, I'm thinking of loading up on the stock to add to my meagre holdings.
Resistance is currently at $0.65 while support is at $0.62, which also happens to be the 50day moving average. A quick look at the chart shows that Stochastics and RSI are almost in oversold regions. From the MACD however, it seems that there may be a bit more selling before prices turn up proper. A good thing if you're looking to buy. Bollinger bands show prices are at the bottom of their volatile range. Consolidation looks to be taking place as a squeeze seems to be forming which could result in a new price movement in the next couple of days. Also MFI is in the oversold region while OBV has been steady implying that quiet accumulation has been taking place while people are selling. A glance at the ADX, reveals that the strength of the trend which started on the 1st of Nov is weakening. This may mean a new trend is about to emerge. However, do note, ADX does not predict the direction of the new trend, it only indicates when a new trend might be occurring. As such, a new downtrend may form instead since it looks like the -DI will cross the +DI.
Volume however, is also low these last couple of days suggesting that not many are selling the stock despite the correction. Even the spike in trading volume on the 10th of Nov, didn't cause much movement in the price. Furthermore, the transactions made today (see table below) shows that selling was only 41,000 shares sold compared to 128,000 shares bought.
My take: Personally, I think the chances of a new downwards trend is quite low. I'm expecting prices to bounce up by early next week. As the fundamentals for Breadtalk are good, the only thing on my mind is if I should wait for Stochastics to turn upwards and cross the signal line first before buying. Hey, after all what goes low can still go lower.
Perhaps tomorrow I'll buy in. Gotta think on this a bit. Hoping it'll drop to the 50day ma though. Lets see what happens.
~K
