Coastal Energy Co. a good candidate as a trading stock.

Aug 13th, 2010 – 1 Comment

As to your question if CEN is a strong hold or a buy I think its a strong candidate as a trading stock.


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Coastal

 

Hi Lou,

I would like to inquire about CEN. What’s going on with this stock,going up and down since January from $6.50to $3.30. Please let me know if it is still a strong buy or hold.

Many thanks,

Dawood

 

Hi Dawood,

Coastal Energy Co.(CEN TSXV) is listed in Canada and has all of its operations in Thailand. Their offshore and onshore wells are producing 13,000 barrels of oil per day. The potential upside for the stock will come from the offshore exploration wells scheduled to begin drilling in September. Lets look at what the charts are telling us.

 

 

 

 

cen

The three year chart  paints the picture of a stock that found a bottom in January of 2009 when it was trading at $1.00. From there the stock began the first leg of an advance that took it through resistance at $3.00 and to an intermediate high of $3.50 in May of 2009. It then retreated to test support on its 200 day moving average at$2.00 in July of 2009.

From there it started the second leg of the advance that took it to the high of $6.50 in January of 2010. You can see the double top that formed which signaled the reversal of the uptrend taking us all the way back to support at $3.o0.

This type of roller coaster stock is not for the faint of heart nor the buy and hold investor. Its ideal for the investor looking to take advantage of the trends and reversals.

 

cen2

The MACD on the six month chart signaled the bounce off of support at $3.00 and the pullback from resistance at $4.80. The RSI also indicated that the stock was overbought in late June and in early August which usually suggests that all of the buyers have been satisfied and that sellers will take control of trading.

As to your question if CEN is a strong hold or a buy I think its a strong candidate as a trading stock. The advances and declines are long enough to generate profits without having to be particularly fleet of foot.

 

Happy Capitalism!

Categories: Energy
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