Petrobank Energy and Resources range bound

Nov 29th, 2010 – Comment

At this point its a range bound trade with perhaps some opportunities for a breakout but nothing that is on the radar at the moment.


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Hi Lou,
What are your thoughts on Petrobank Energy? Is this a good buy at
the current price?
Thanks,
Cris

Hi Cris,

Petrobank Energy and Resources Ltd. ( PBG TSX) has been somewhat range bound since May of this year with resistance at $44 and support at $40.00 and again at $37.00.  PBG has been successful in developing projects and new technologies to enhance recovery of heavy oil reserves. The charts however indicate that the stock is in a range bound pattern that it needs to work through.

The three year chart illustrates the robust advance from the March 2009 lows just shy of $20.00 to $56.00 in May of 2010. But that trend has ended and as mentioned the stock has been trading in a range.

The six month chart depicts the current patterns for PBG and the support at $40.00 and $37.00 and the resistance at $44.00. On November 02, 2010 the company announced that it intended to spin out its holdings in Petrominerales Ltd. (PMG TSX) to existing shareholders.

The MACD has provided a number of buy and sell signals over the course of the last six months and if you intend on buying PBG you will need to rely on it or other indicators to identify entry and exit points.

At this point its a range bound trade with perhaps some opportunities for a breakout but nothing that is on the radar at the moment.

Happy Capitalism!

Categories: Energy
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