ppp its in the charts.........time to head n

An Oil Junior with More Momentum Than Crude…
By Gabriel Andre

The energy sector in the Aussie market continues to outstrip other industries. Crude hit an all time-high of US$143 in New York last night. We see a few oil juniors moving with it. Pan Pacific Petroleum (ASX:PPP) is one stock that can keep this up.

The stock has dug itself a nice little channel, trending upwards. Sellers have tried to push PPP outside this channel a couple of times. They’ve done nothing more than create false break-outs. They couldn’t establish momentum.



That’s really the story of the energy sector at the moment: momentum. Selling in hope of a correction is like stepping in front of a freight train, hoping to find a dollar on the tracks. These false break-outs on PPP’s chart are typical traps for short-term traders. Don’t fall into one of them.

No…instead…look at the company’s upside potential. Between points H and E on the chart, the stock added 49%. That’s a feel-good gain for less than two months work.

Since then it has corrected. We don’t think it’ll go all the way back to the trend’s resistance line though. Take a look at how Fibonacci traders have treated it.



That 61.8% Fibonacci level is now a strong intermediary support. PPP has consolidated from there. With that support underneath it, a few indicators argue for the next leg of profits.

The MACD just crossed its signal line. Take note of that. The MACD has given off good signals like clockwork for PPP. We don’t expect that to change now.

The Stochastic Momentum Index is also bullish. It’s a similar story. The trend is up, and it just crossed the signal line. There’s a good chance selling in this stock has finished.

Keep tabs on where PPP closes today. If it’s up, that’s as good a confirmation as you’re going to get. In that case, it’d probably move on to test resistance at 34 cents.

Good investing,

Gabriel Andre

charts etc to go with this are on the original at www.moneymorning.com.au/free-financial-content/