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Tuesday, January 12, 2016

PetronM: Time to take profit

PetronM has rallied like a rocket in the past 3 weeks. It has just tested the upper line of its irregular upward channel (RR) at RM7.00-7.30. While it is possible that it may even revisit its 1996 high of RM7.50, the odd of that happening is not worth the wager.

The sharp rise in PetronM is due to the exceptional circumstance of low cost of input material (i.e. crude oil) and the regulated higher price of refined products. This exceptional sweet spot occurs once in a long while. Make the best of it but don't overstay. When the situation reverses, refiners' margin will be back to normal (or even goes negative). Then the current high share price will be like a distant dream.

It's good time to take profit.


Chart: PetronM's monthly chart as at Jan 12 2016_9.30am (Source: ShareInvestor,com)

Conclusion

Based on tentative turnaround  & technical support sighted at present price, PetronM could be a good stock for a recovery play.

Note: 

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, PetronM.

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