Sino-Forest Corporation (TSE:TRE) stock remains a target for bulls because of its price action although the content of recent news suggests it is all just speculative buying.
TRE was going up for two days in a row and added nearly 38% over the time. Traders are still not backing off even though the news were mixed lately. The trading volume didn’t get significantly above the average though, thus there isn’t much strength to the rally.
The closest serious resistance it at $5.30 and another one clearly at the round number at $5 could also obstruct the appreciation. Price went up in a similar manner in the beginning of July and didn’t fall all the way back down before the current rally, which is encouraging the bulls.
Just before the price started pushing up Sino actually had some bad new – Moody’s downgraded their borrowing rating. Sino’s debt was given B1 rating, down from Ba2 and further downgrade remains an open question until Moody’s done reviewing.
On the brighter side, it was recently announced that billionaire Richard Chandler has acquired more shares of Sino, increasing his ownership to 11%.
This was a bold move considering the company saw their share price plunge over 80% on June 2, after Block’s Muddy Waters LLC published allegations that company might have overstated their timber holdings in China. Sino’s management is still fighting to prove otherwise and has commissioned an independent investigation.
