Bankers Petroleum Ltd. has been punished for missing forecasts

Sep 19th, 2011 – 3 Comments

At this point in time the RSI and MACD are not indicating a shift in momentum to the upside


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Hi Lou,
Have you changed your outlook for BNK from your May 20th comments?

Regards,

Al

 

Hi Al,

This will be the third time I have run the charts on Bankers Petroleum Ltd. ( BNK TSX) in 2011. The first time was on January 14, 2011 for William when the shares were trading at $8.67. At the time it looked like there might be more to come based on the anticipation of increased production from their heavy oil assets in Albania. BNK got a lift  to $9.92 before it started to gasp for air.

On May 20, 2011 on a request from Humayum I took a second run at the charts and mentioned that a downtrend had been established and that volume had thinned out. It was advised to wait before committing capital given the trend. Retrospectively that was the right call.

Another review of the charts will assist in making a buy, sell, hold decision.

 

 

 

 

The three year chart depicts the downtrend that started in March of 2011 and has dragged the stock from a high of $9.92 to its current value of $4.40. A 55% reduction in market value  is what will drive investors to extreme alcohol therapy for relief. 

After conducting research on the company’s Q1 and Q2 reports its clear that although the year on year and quarter on quarter performance was outstanding, they failed to meet street expectations. Typically when a company fails to meet the street the stock gets punished. BNK is expected to report Q3 on November 11, 2011. Make sure to post this date on your calendar if you own or are thinking of owning this stock.

 

The six month chart provides a visual example of a stock in distress. A series of lower highs and lower lows, a death cross that formed in late June of 2011, and an established downtrend. At this point in time the RSI and MACD are not indicating a shift in momentum to the upside. BNK has caught a couple of bounces off the ledge of support at $4.00 but until there is a trend reversal it would be prudent to stay on the sidelines.

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