Today we put the focus on Computer Modelling Group Ltd. (TSX:CMG) as we believe that the stock chart is displaying some interesting technical signs and may be ripe for a break out in the not too distant future.
While the stock is still technically in a downtrend that began back in mid-2015, the current share price is very close to the downward trend line and with recent bullish signs in the daily chart, the stock may have enough ammunition to break out of that medium term downtrend and head higher in the short term. Looking at resistance, we see resistance around $10.50. In fact, this area is not only static resistance, but is also the approximate area of the medium term downward trend line and the 200 day moving average. Above that level, resistance would come in around $10.90 and $12.20. As for support, we would watch the $9.75 level on any downward price pressure.
Our trade strategy would be to enter the stock only upon a close above $10.60 on strong volume. Upon a successful entry, we would place a price target at $12.20 and a stop loss at $10.40. Based on a $10.60 entry level, our upside potential looks to be 15.1% while our downside risk is limited to 1.9%, for an impressive upside potential to downside risk ratio.
The stock price direction for the day for CMG:CA is UP. This stock is currently not trending in any direction or the stock may be fluctuating over the last 5 to 7 days, but after all the fluctuations, finds itself in roughly the same price point as it did when BullishInvestor.com started analyzing it 7 days earlier. As a result, the trend for this stock is too weak to properly analyze at this time. That being said, short spurts of share price increases or decreases can still occur even though a trend has not been properly analyzed which is why watching the BullishInvestor.com daily ratings may be able to pinpoint quick entry and exit levels in this stock. Based on BullishInvestor.com’s proprietary algorithms, CMG:CA is currently signalling NEUTRAL.
The most recent Candle Stick pattern for CMG:CA is the Belt-hold.
There are two possible reasons for the Hold rating currently given to CMG:CA. The first reason is that there may be indecision among the technical indicators or most of them may be neutral for CMG:CA. If the stock chart looks flat lined or is in the midst of a trend direction change, most likely this is why CMG:CA is showing Neutral. If, however the stock is currently in a visible up or down trend, the reason for the Hold may be because the BULLISH or BEARISH rating has already passed.
The last BUY was registered on Feb 14, 2024 when CMG:CA was trading at $ 9.21. Armed with this knowledge, there may still be some more strength left in this current trend or it may be near a tipping point, the market has not given a clear indication yet.
As such, it may be a wise decision to hold your stock or continue to wait on the sidelines in CMG:CA until BullishInvestor.com changes the rating for CMG:CA.