It has been pretty painful to be long in CNEH over the past 6 months. However, I have several reasons to believe we are near a bottom. First of all, notice that the decline has been rather choppy, without forming clear 5-wave declines. That's indicative of a correction. WaveC would equal WaveA at 1.75. Price hit 1.61 this morning. Also, it looks like Wave-c of WaveC is forming as an ending diagonal. These are normally followed by sharp up moves.
Another interesting fact: volume has been downtrending as price corrected. That means that less and less shares are being sold as price is declining, a good sign of future strength.
Finally, there is MACD-divergence forming. When MACD curls up, the divergence will be confirmed.
Ideally, I would like to see a close around 1.75 or 1.80 on higher volume than yesterday. That would tell me that today's price action was a final washout of the ending diagonal.
6 comments:
Information about CNEH is especially difficult to find but here are a couple of excellent articles.
http://seekingalpha.com/article/62400-the-long-case-for-china-north-east-petroleum?source=yahoo
http://seekingalpha.com/article/46513-china-north-east-petroleum-holdings-too-small-to-buy-or-too-impressive-to-ignore
The stock still trades on the pink sheets but hopefully that will change because all this company needs is exposure to more investors. In my view, this is a rare find.
Kevin Brennan did his homework.
CNEH actually trades on OTCBB. They just completed a financing deal which includes a requirement to obtain an AMEX or NASDAQ listing by Feb 2009.
Thanks for the correction. I got the "pink sheet" notation from my broker, who does not have a lot faith in the stock but I still do.
Thank you for the correction. I
Thank you for the correction. Do you know of any other place to find current, accurate information about this company?
www.investorvillage.com
there is a lot of good info, but you have to wade through a lot of pumpers and bashers. good luck!
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