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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 But now this approach is no longer valid, because further short order is no longer recommended.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
