The Patos Marinza oil field in Albania
Hi Lou,
What is your analysis on Bankers Petroleum? Is it time to buy?
Thanks,
Humayun
Hey Humayan,
Thanks for the assignment.
This will be the fifth time since 2011 that I explore the parameters in play at Bankers Petroleum Limited. The second time I examined the stock was in May of 2011 on a request that you sent when the shares were trading at $7.87. It was advised that the shares were not presenting a good buying opportunity given that there was an established downtrend in place and the volume was thinning out. Given what transpired after posting my analysis that was the right call as the shares continued to trade lower.
My last study was conducted on May 16, 2012, when the shares were trading for $2.12. Jim wanted to know if it was too late to sell his shares which he had bought for $2.34 and watched run to over $9.00. I suppose the lesson in that situation was to capture profits when they were available and not get caught like a deer in the headlights. To me it was a case of good loving gone bad. Falling in love with a story and spinning in a cycle denying that Mr. Market is screaming SELL!!! By July of 2012 the shares hit a rock bottom below $1.50 where they caught a bounce.
Another investigation of the charts will help define the opportunities and risks that are currently in play.
The three-year chart illustrates the move up in July of 2012 that then established a range bound pattern with support at $2.50 and resistance near $3.25. A golden cross surfaced in July of 2013 as the shares broke above resistance and started a new uptrend. The current advance has found support along the 50-day moving average and built a base at $4.00 before moving up neat $5.00.
The six-month chart provides magnification of the most recent patterns. The MACD and the RSI generated sell signals in January which saw the stock pullback from $4.60 to just above $4.00 where they signalled a buy that has taken the shares through $4.60 to $4.93. At this point the analysis conducted on your behalf indicates that there is a new uptrend in place with support along the 50-day moving average which would encourage a decision to buy. However, make sure you maintain daily surveillance in the event of a reversal.
Make it a profitable day and happy capitalism!
Have your own question for Lou? Send it in to lou@happycapitalism.com.
Lou Schizas