Great Upside for Great Lakes Dock & Dredge
- Posted by Greg Harmon
- on January 8th, 2013
The economy is starting to grow again, and that is good for every company in the United States. They all have a tailwind now. This effect is starting to show up in the US Equity Indexes as they begin to move to new higher highs, supplemented with the view that governmental financial issues will become certain at some point soon. Of course there will be winners and losers along the way. One place to look for winners is in the shipping sector, but maybe not where you would expect. The railroads have good prospects but rarely big price swings, and the trucking industry could have a double benefit if Crude Oil prices continue to decline. But one company already has that double benefit in its future. With the Mississippi River at record low levels barge traffic is facing concerns. One company, Great Lakes Dredge & Dock Corporation (ticker $GLDD) based in Oak Brook, Illinois, is already cashing in on projects up and down the Mississippi. With the added boost of a growing economy and financial clarity with producers looking to ship, there stands to be more need for their services. Some of this has already been reflected in their stock price. You might think that picking this name as the winner in 2013 is crazy with it up over 60% in 2012. But the technicals support a much greater move. Take a look. The daily chart shows a rising channel that is reaching
the mid line between the Lower Median Line and the Median Line of the Andrew’s Pitchfork. In the middle, it could be attracted to either Median Line but what is important is that the Pitchfork is running higher with no sense of any impending test of its support lower. The trend is higher. But it is the longer views from the weekly and monthly charts that look even better. The weekly chart below is showing a break above the 4 year long consolidation channel between 4.00 and 8.60. It is natural that as it breaks above this channel that it will consolidate, as it is doing in late December.
The target for the break of the channel is a move to 13.20. Got your attention now? And look at the Relative Strength Index (RSI). This measure of the strength of the move is solidly in bullish territory and rising, supporting a continued move higher. The Moving Average Convergence Divergence histogram (MACD) is also positive and growing adding weight to the bullish case. But the picture gets better. Moving out to the monthly view shows that it broke an ascending triangle in November and is consolidating that break out in December. The target from the triangle break is a move higher to 14.30. The RSI and MACD on this timeframe also support a move higher. And a quick
look at the accumulation/distribution line shows it strong and at highs. Finally, a glance at the 3-box reversal Point and Figure chart, where time does not matter, shows a price objective of 19.25 on a double top breakout. Will there be a retest of the break out levels between 8.30 and 8.60. It probably will, but the potential for upside is not to be ignored. Oh, and for those of you that do not believe in the voodoo of technical analysis, the few fundamental analysts that follow it are bullish. At least they were a year ago. So it is underfollowed as well. Another plus.
This article was originally written in late December for the Investor Place Best Stocks of 2013 contest. The charts have been updated to show the story is unchanged. I own this stock at the time of this posting.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- SPY Trends and Influencers February 28, 2015
- Macro Week in Review/Preview February 27, 2015
- Is Your Portfolio Compatible with the Year of the Goat?
- Benzinga Premarket Talk Thursday Morning
- A Brief History of Trading and the Trading Stocks
- Premium Earnings 2-26-15
- 3 Reasons the Transports May Need to Refuel
- It Was Hard Saying Goodbye to Ruby Tuesday
- Premium Earnings 2-25-15
- Want to Short the US Market, Then Do it Against Germany