The
current market situation on Petroneft Resources (LSE:PTR) has now become
extremely attractive for traders and investors. The shares price has reached a
stage where it would soon favor the bulls. A new long-term bullish wave is
expected soon (as the pernicious bearish pressure is repudiated). Then the
price would start going up in a northward bias, since a northward bias would be
of higher highs and higher lows, each low should create a new higher high; if
bearish attempt fails. This would be an opportunity to create long orders.
Technical Forecast
This
stock has already been in a very long-term downtrend, as the chart below shows.
Four Exponential Moving Averages (EMA period 10, EMA period 20, EMA period 50 and
EMA period 200) are used in this analysis. The color representing each EMA is
shown at the top left on the chart. The EMA 200 confirms this long-term
downtrend. In the past the best strategy would have been to go short, or
opening new short orders as the price retraced to the EMA 10 or 20. But now
this approach is no longer valid, because further short order is no longer
recommended. The indicators are now showing a trendless market. The logical
thing to do now is to get prepared to buy. WHEN?
The
market began a weak rally in August 2012, but further rally was rejected within
the same month. The price has been corrected lower a little. In this month, the
price found a unique bottom at 6.875, and it is not expected to go down beyond
the level at 6.00 (and the demand level at 5.50): if this forecast would be
valid. After all, it is expectations for the future that are traded on the
stock market. The stock was trading at 7.375 as this article was being written.
There are supply zones at 7.50 and 8.00. Eventually, this stock would become
very attractive for buyers when the EMA 20 crosses the EMA 50 to the upside. The
currently ineffectual and superfluous southward pulls would soon be
obliterated.
Conclusion: Petroneft shares should
rise after an overextended bearish run. Going
short in the present price situation, as it is true of similar market
conditions, has often been likened to grappling with a leopard. The stock
markets proffer adequate predictability for us not to obfuscate matters by
prevaricating trading methodologies.
This
article is ended with the quote below:
“The odds are you
won't get it perfect the first time you try it. However, in life as in trading,
he or she who waits watches others harvest. They must live with the pain of
regret because they didn't act, they delayed, and they hesitated.” -
Loiuse Bedford
NB: You would be exposed to
world-class, cutting-edge, and top-notch trading experiences here: www.advfn.com
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Copyright (C) ADVFN PLC
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