Will asked in Business & FinanceInvesting · 6 years ago

how many shares would you put in NATL? (National Interstate Corporation) Momentum trading question?

volume question your input is valued thanks

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  • 6 years ago
    Best Answer

    First of all....you have assumed that this company is worth investing in...actually I agree with you but I will give you a reading of the charts as to why.

    First of all fundamentally it is quite sound with a drop in its debt load from $22 to 12 million in the last 2 quarters and a steady Net Income of $7 - $9 million per quarter while paying a modest quarterly dividend of $0.11/share 1.25% yield

    http://web.tmxmoney.com/financials.php?qm_page=988...

    Technical analysis

    http://stockcharts.com/def/servlet/SC.pnf?chart=NA...

    The stock has had a meteoric rise in July passing its highest ever resistance at $34.50 - $34.75 ...this makes for a very attractive stock. How high it will rise is unpredictable right now but I would suggest there may be a rest coming as the stock has gained about 25% in the last 3-4 weeks from the look of it so I would expect a slowdown in the rise coming.

    However the $34.25 - $34.75 should be a pretty solid support with a secondary support at $32.75

    http://stockcharts.com/h-sc/ui?s=NATL&p=D&yr=0&mn=...

    this is a very bullish chart....there is no hint yet of a slowdown in this rise in share price....the slopes of the BBwidth and MACD are very straight and strongly positive...as well the Slow Sto is pegged over 80 with STILL a slightly positive slope.

    this latest run is much stronger than the breakout on March 30....the end of that run is signaled with the reversal of slope of the MACD and BBwidth on Feb 19-22...with a slight fall of the Slow sto giving a heads up (though it still looked decent as it was around 80 at the time....the reversal of the MACD and BBwith is the trigger.

    So as far as the end of this run goes...the Slow Sto will start to fall but won't be serious unless it falls sharply below 80 and then after that the MACD and BBwidth will reverse direction.

    Is that a sell sign? It depends on your investment goals ... it could be if the % gain meets your criteria but it may be just a rest ans consolidation before another positive run....an evaluation would have to be done again at that time.

    http://stockcharts.com/h-sc/ui?s=NATL&p=D&yr=0&mn=...

    this is a bullish sentiment chart...no bearish signs at all at this point

    http://stockcharts.com/h-sc/ui?s=NATL&p=D&yr=0&mn=...

    another bullish chart in the short term

    Conclusion

    This looks like a fine stock....a lot will depend on your goals. As to how much you should buy...that is up to you and your financial resources/risk.

    As I said this has had a nice run of about +25% in the last 2 weeks....one would expect a bit of profit taking to be taken soon which would signal the end of the current run...but does it signal the end of the bullishness of the stock for the longer term....I am not so sure of that. Pullbacks from profit taking are a natural event.

    you are entering this run on the tail end so more caution is warranted. You might start with a smaller purchase of 50-100 shares, if the consolidation when it comes goes sideways and the Slow Sto stays above 60...you would wait for the next Bollinger band squeeze before deciding to commit more money to the stock. A stop loss at about $34.00 would be prudent and protect you if the support was breached.

    Good luck

  • 6 years ago

    Well it depends on how much money you have to invest, but if it were me, I would set a stop loss at least .55 points from current the market price. adjust as the price rises, close the point gap to lock in profits at the end.

    Looking at a chart, that my take.

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