Degelat Group Ltd (DGL.NZX)

27 September 2017




Technical Summary: DGL is in a long term uptrend. This has extended from the 5 year chart on the right to the 1 year chart above. The trend has been relatively slow moving with the stock moving from around $3 per share to $6.70. A case can be made for buying this stock on its dips within the trend. If you were a believer in this style of investing then this would make DGL buyable at the current juncture. Investors should look for strength before buying on dips which the stock has shown in the last few sessions. One major issue with buying and selling DGL is liquidity. Whenever you see a chart that looks scattered or patchy as the chart above does you can deduce that there is not much liquidity in the stock. Indeed the stock typically trades on low volume. This can create an issue when you want to get into the stock. Market orders will likely move the stock price. If you need to sell at the same time as everybody else it can be challenging to get out of. This can result in a price much worse than desired. The stock is therefore only suitable for long term investors, not traders.

Solid uptrend. What about the liquidity?

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