One of the beautiful things about technical analysis is it quickly evaluates a stock. Without a lot of debate, you can quickly understand a trend. Is it up or down? Well, this morning, Ballard (BLP.TO) crossed into one of my scans again. What used to be one of the high rolling stocks 15 years ago, is actually rising up after being in a long-term meltdown. I'll leave it to you to decide if you want to investigate a micro-cap stock of $350 Million, but it has a lot of interesting qualities that made it worthy of an article this morning.
We can see the stock has popped up many times before, but rarely did it last more than a few weeks. This stock has also had more failed starts than any investor would like to endure. Fool me once, it happens; fool me again and again, my bad. So if the reputation of delivery by management is in question, this stock has all the hallmarks of hype and no follow through technically. I will say that they have partnered with some of the largest firms in the world. The technology has promise, but it seems hard to deliver.
First of all, the SCTR has stayed above the 75 level for 4 weeks. The straight line in the middle of the SCTR is when the price / volume was so low the stock did not have an SCTR. We can see in the chart a surge above the downward trend in 2013. The surge lasted for almost a year. The stock exceeded it's breakout level by 6x before it was done within 9 months! Common in hot trends, a parabolic blowoff ensued. Now we can see another 2-year downtrend that did not return to the long-term low. What makes the stock more interesting now is the consolidation (bull flag) after breaking above the trend line.
Lastly, I have only shown the last 10 years, but this used to be a $100 stock! Watching it wrestle around at the $3.00 level for most of the chart shown is really incredible. However, If you look at the MACD, you'll see the stock rarely has positive (above zero) momentum. The recent volume spike has follow-through volume and the MACD is rising. Other than the blow off top, the stock has not had a volume surge like it had in July 2016.