Back in May I had you check out Mart Resources. A lot has changed in the energy space as well as for the company in the past few days.
They’ve gone through some rough times which pulled the price down over the past few months. Two days ago they announced that their long-awaited pipeline is now flowing. It has been roughly 2 years in the making.
What do you think of the play now?
Thanks for bringing Mart Resources Inc. (MMT TSX) back for another inspection. The May 26, 2014 analysis indicated that the stock was building support near $1.45 and the MACD and the RSI were turning slightly higher. With a 13.51% dividend yield and the forthcoming completion of the Umugini pipeline in the second quarter it was advised to hold the stock. Unfortunately the hold period only lasted until September of 2014 when MMT followed the entire oil and gas sector lower as energy prices began a ruthless decline. Constant surveillance is not an option when it comes to asset management it is strictly required!
On a corporate basis MMT has had some positive news to report in October including their participation in a consortium that acquired an interest in Nigerian Oil Mine Lease 18 which covers wells producing on average 20,000 to 30,000 barrels of oil per day. MMT paid $134m for their 10% share of the output. The company reported the completion of the Umugini pipeline in the same month and then in December of 2014 reported that oil had begun to flow.
A survey of the charts will provide greater visibility as to the trend, support, and resistance associated with MMT.
The three-year chart provides examples of a number of patterns that need to be monitored to provide insight into how best to manage your investment. The breach of support at $1.45 in late June of 2014 and the test of support along the 200-day moving average near $1.30 in July and August provided two early warnings that the case for MMT needed an update. The death cross that surfaced in September put another caution flag on the track signalling that investors could anticipate sellers taking control of the market.
The six-month chart provides a close up of the death cross that formed in early September as well as the sell signals generated by the MACD and the RSI later in the month. The momentum indicators signalled a buy as the shares hit their 52-week low of $0.45 in December. What also needs to be respected is the resistance that has been established along the 50-day moving average and the downtrend line.
The evidence on hand indicates that MMT has managed its affairs well but the macroeconomic trend in the oil patch has obscured those achievements. Until oil prices rebound I wouldn’t expect a trend reversal.
Make it a profitable day and happy capitalism!