Pinecrest Energy Inc. testing support

Oct 2nd, 2013 – 1 Comment

As we came into September of 2013 the MACD and the RSI both signalled that a trade was setting up as PRY hit the rock bottom at $0.375 and caught a bounce.


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PRY LOGO

Hi Lou,

Can you review PRY please?

Thank you,
Ron

 

Hey Ron,

 

Thanks for the assignment. Pinecrest Energy Inc. (PRY TSXV) seems to have all the right elements to drive shareholder value. It has a large land base in the Bakken oil play in Saskatchewan, and its production is skewed to light oil. However the last year and a half has been brutal for shareholders. The shares traded near $3.30 in February of 2012 but have given up most of that value. There has been a move off the 52-week low of $0.375 that started in September 2013 which is probably what motivated your email.

 

A study of the charts will better inform my thoughts on PRY.

 

PRY

The three-year chart offers a number of interesting patterns worth examining. The double top in February of 2012 ,when the shares hit the highs near $3.30, signalled that the good times were at an end and that investors needed to revise their expectations. The death cross that surfaced in May of 2012,when the stock was trading for $2.25, provided another incentive to get off the field of play and preserve capital.

As we came into September of 2013 the MACD and the RSI both signalled that a trade was setting up as PRY hit the rock bottom at $0.375 and caught a bounce.

 

 

 

 

 

 

PRY2

The six-month chart depicts the buy signals generated by the momentum indicators in September which took the shares to a high of $0.61 on September 26, 2013. What is also evident is the resistance that comes in at $0.60 and the subsequent retest of support along the 50-day moving average. At this point the MACD and RSI are turning lower indicating that traders who caught the ride off the lows have been harvesting profits and may continue to do so.

If you are thinking of buying it would be prudent to ensure that support along the 50-day moving average holds.

Make it a profitable day and happy capitalism!

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