Boston Pizza Royalties Income Fund

04/22/13 04:50:51 PM

by Koos van der Merwe

Receiving a distribution when you hold a share is always welcome, but receiving the distribution and having a capital gain is even more welcome.

Security: BPF'U-T
Position: Accumulate

Boston Pizza International is a franchise-driven casual dining restaurant company. The company is Canadian owned and operated with restaurants in Canada and the United States. Since inception they have given investors a steady monthly distribution per unit that has slowly increased over the years. In March 2013 they increased the distribution from 0.098 to 0.102 per unit. This has seen the share price climb steadily over the years.

Figure 1: Daily chart with VOTE line.

Graphic provided by: Omnitrader..

The chart in Figure 1 is an Omnitrader chart with the vote line showing a new buy signal as the share price rose to $22.75 on April 19, 2013. The vote line gave its signal based on the Jean Moon strategy. This strategy is when the price rises above the upper band of a 15-period moving average offset by 2% positive. Note how on the chart the price also broke above the Verve trailing stop. The price broke above the close trailing stop on April 16, 2013. The close trailing stop is an indicator that warns us of a possible buy or sell. Looking at the chart, you can see how successful the vote line buy signals were.

Figure 2: Daily chart with JM Internal Band.

Graphic provided by: AdvancedGET.

The chart in Figure 2 is a daily chart showing the JM Internal Band, a 15-period simple moving average offset by 2% positive and 2% negative. Note that a buy signal was given on November 27, 2013. The RSI indicator suggested a buy signal on November 16, 2013 — 12 days earlier. The RSI gave a sell signal on April 8, 2013, that was not confirmed by the JM Internal Band indicator, where the drop in price did not break below the lower JM Internal Band.

Figure 3: Monthly chart with Elliott Wave Count.

Graphic provided by: AdvancedGET.

The chart in Figure 3 is a monthly chart with an Elliott Wave count, suggesting that a WAVE 3 is in process with a possible target of $24.70. The RSI indicator is not giving a sell signal, suggesting that the price could rise to $24.70 before correcting in a WAVE 4.

The daily chart in Figure 1 is suggesting a buy for Boston Pizza. The daily chart in Figure 2 is bullish, as is the monthly chart. You can, however, see that a correction could occur in the near future. You should wait for the correction to occur, and buy as the price corrects. A share with a solid steady monthly distribution is always welcome.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address:	3256 West 24th Ave
	Vancouver, BC
Phone # for sales:	6042634214
E-mail address:	petroosp@gmail.com

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