OPTI failed to move higher in the last 12 months

May 21st, 2010 – 1 Comment

  Hi Lou , Keep up the great work and have a great summer! I was just wondering what your opinion of OPTI Canada is. It seems like this would be a great stock to buy and forget about for a year or two. With their production targets just a matter of time and the […]


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opti

Hi Lou ,

Keep up the great work and have a great summer! I was just wondering what your opinion of OPTI Canada is. It seems like this would be a great stock to buy and forget about for a year or two. With their production targets just a matter of time and the inevitable rise in oil price.

Thank-you,

Steve

 

Hi Steve,

On May 22 2009 I covered OPTI Canada Inc. (OPC TSX) which I invite you to take the time to review that piece of research and analysis. At the time it looked like OPC was running out of gas and was in the process of giving up some of the gains it had racked up from the March 2009 lows. The best you can say is that the stock has been able to find support but at lower levels.

 

opc

The three year chart illustrates the weakness in the stock but also the support in the $1.85 – $1.90range. That of course is of little comfort to investors who got in at higher levels.

 

 

 

 

 

 

 

opc2

The six month chart tells the tale of a stock that has had trouble breaking through resistance at $2.30 – $2.40 and has fallen back substantially on a percentage basis. Neither the MACD nor the RSI as signaling an upswing in momentum.

 

I don’t think that a buy and hold strategy works at this particular time or for this particular stock at this particular time. The best time to buy a stock is when its moving higher. OPC hasn’t been going in that direction for very close to a year.

If you like the company and the story than track it for a reversal of the trend but I don’t see a need to invest in OPC at this time.

 

MAKE IT A HUGE VICTORIA DAY LONG WEEKEND AND HAPPY CAPITALISM!

 

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