Go to the Globe and Mail homepage

Jump to main navigationJump to main content

PetroBakken drilling rig. (Gord Pitts/Gord Pitts/The Globe and Mail)
PetroBakken drilling rig. (Gord Pitts/Gord Pitts/The Globe and Mail)

Schizas' Mailbag

PetroBakken Energy Ltd. still in an uptrend Add to ...

Hi Lou,

I am a shareholder in PetroBakken and have been rewarded by its upswing of the past few months. I was considering taking some profits recently but I recall reading somewhere that you should run with your winners and cut short your losers. I think PBN just posted a breakout above $17 and appears to be profit-taking mode right now.

More related to this story

Do you think we are at a level of strong support here? Where do you see it in the next six months?

Thanks for your comments,

Bart



Hi Bart,



This will be the seventh time I have analyzed the shares of PetroBakken Energy Ltd. since Oct. 15, 2010. To some that might seem excessive, but to those that have invested in a stock a review of the charts should become a part of your daily routine. In addition, you need to review the news stream to see what information has hit the market and you also need to know when a company is expected to release their quarterly results.

My last post for PBN was on Jan. 25, 2012 when all the signals were indicating a buy at $16.37. With the stock currently trading 3.8 per cent higher at $17.00 it is worth the effort to once again run the charts.

The three-year chart indicates that we continue to enjoy an uptrend from the Sept. 30, 2011 lows of $6.05 and that the shares are holding support along the 50-day moving average. In the Jan. 25, 2012 analysis it was noted that a golden cross was about to form and now it is clearly present.

The six-month chart boasts a solid uptrend line, support along the 50-day moving average holding, and a golden cross. The MACD and RSI are not providing any information with regards to direction, which is a call for continued surveillance. The current dividend yield of 5.7 per cent also makes the shares attractive.

When you ask if you should take profits it is a signal that your gut is telling you to cash in some if not all of your chips. My advice is when you get that twinge – go with it. You can always make another decision once you have addressed your concerns. Never worry about profits you missed by getting out early, Warren Buffett has done pretty well with that strategy.

At this particular point I don’t see an immediate breakdown in the uptrend. The company is expected to report first quarter 2012 on May 10 so make sure you have that marked on your action calendar. Plus, keep in mind that selling comes into the oil and gas stocks as we move into May. Make a review of your holdings an everyday habit and you will reduce your risk and improve your profits.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to lschizas@globeandmail.com.

Visit his website

 

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories