The Transparent RRSP: Relative Strength

The Week of August 14
  • On Wednesday, August 16th, I bought 100 shares of Bombardier (BBD.B.TO) at $2.65 per share.
  • With $1 in commissions, the whole purchase was $266.00. I now have $18.47 in cash in the RRSP account.

I actually meant to buy the shares on Tuesday, but I totally forgot to put in an order! So, on Tuesday night, I put in a limit order to buy 100 shares at $2.68, a couple of cents above the current bid/ask price. I was peeved by my sloppiness, but I’d been stalking this stock all month, watching it against the market. I wanted it that badly that I was willing to pay more than I knew I should have.

Thankfully, on Wednesday, my order was filled at the lower price of $2.65! This happens sometimes; other times it can go the other way and your order will be filled at a much higher price. It’s called slippage when you get filled at a higher price than what you have on order. Slippage tends to happen more when stocks are lightly traded. Bombardier is a heavily traded stock, so slippage is less likely to happen.


Let’s do some chart analysis!

 

BBD analysis

Price charts for BBD.B and XIC on freestockcharts.com

On Chart #1, the pink arrow shows the day I bought BBD.B. No special day and it closed negative. On Chart #2, the pink arrow for the XIC market ETF shows the market on the day I bought BBD.B.

The blue arrows on both charts #1 and #2 show how they closed for the week. BBD.B closed more positive than the market did, showing relative strength. There’s been uncertainty in the overall markets in general with the possibility of war — and then you add violent protests and terrorist attacks to the mix and you get even more negativity. I hope this little stock, along with the rest of the RRSP portfolio (come on, LIQ!), will show resilience in the face of all this.

Chart #3 is the weekly chart for BBD.B. It’s a healthy looking chart with a very bullish setup. (If you’re not familiar with the market lingo, bullish means optimistic and positive because apparently, bulls look up when they’re in attack mode; bearish means negative and pessimistic because bears look down when they’re about to pummel you. There could be more to the meaning of these terms, but all that matters is that you get the picture.)

Chart #4 shows a lot of potential for BBD.B to move up if and when it gets past the previous price resistance points as seen on that pink dotted line.

Of course, all of this can go potty — regardless the relative strength and bullish setups — if the overall markets get really negative and there are more sellers than buyers. No matter what, just try to stay positive and strong!

 

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