Baytex Energy Corp. not providing evidence of a trend reversal

Nov 6th, 2015 – 1 Comment

Caught a nice bounce off the 52-week low


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BTE LOGO

I acquired Baytex shares over the last month or so. I paid $4.10 for my first lot and added more at 4.70. What is your near and long term evaluation of the stock price? How likely is the possibility that Baytex will be bought by a larger producer by Q2 2016??

BH

 

Hey BH,

Thanks for the assignment. This will be the first time that I inspect the charts for Baytex Energy Corp. (BTE TSX). My evaluative process involves taking a snap shot of the trend, support, and resistance that is evident at the time of the study. What is required after that is constant monitoring to see what Mr. Market is telling us about how the stock is performing.

I have to recuse myself from speculating on mergers and acquisitions activity. There are simply no metrics that I can use that will effectively identify which company is a buyer and which is a seller. What is clear is that we are seeing some consolidation in the Canadian Oil Patch driven by the fear that weakness in the price of energy will endure.

An examination of the charts will form the basis of my opinion.

 

BTE

The three-year chart tells the tale of the awful decline investors have endured since the price of  oil started its retreat in the late summer of 2014. There were plenty of opportunities to get off of this ride to hell and preserve capital over the course of the collapse and avoid the 52-week low of $3.91 in late September of 2015.  As they say in poker this was a bad beat.

As for your purchases you deserve a hardy well done! You caught a nice bounce off a rock bottom and are sitting on a healthy return.

 

 

BTE2The six-month chart highlights the bounce off the 52-week low and the resistance along the 50-day moving average. There was a move through resistance in November but the best case would see BTE build a base and turn resistance into support. At the moment there is scant evidence that we can expect a trend reversal in the near future.

I would suggest that you book some of your profits while they are still available.

 

 

 

 

Next time I will audit the charts of Potash Corporation of Saskatchewan Inc. for Doron.

 

Make it a profitable day and happy capitalism!

 

 

 

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