Tuesday, November 25, 2014
NOL: Technical rebound alert. Shares have been sold down massively after the disappointing 3Q14 results, and subsequent broker downgrades. At 0.8x P/B now, valuations are low compared to the historical average 1x multiple, setting the stage for a potential rebound play. Over the past one month, a bullish divergence has been taking place, as share price slid, while the key technicals indicators rose. With RSI and Stochastics emerging from an extended period of being oversold, and share price rebounding off the $0.735 floor, a bottom may have been found. Near term target at $0.84, which is the Oct high cluster, and close to the 50 day moving average. Risk reward looks attractive relative to the $0.735 cut loss level.