Perdana Petroleum Bhd

My friend called me over the weekend and ask me to have a look at Perdana Petroleum Bhd from technical aspect.

I should say Perdana was very well behaved from its 2007 peak of Rm4.60 to its May 2012 low of Rm0.48. It has form a zig-zag A-B-C corrective wave with a 5 waves A, a 3 waves B and another 5 waves C.

Its OBV is very impressive. There is divergence between its price and its OBV movement, indicating strong accumulation since December 2010. It is very rare to get a stock with such divergence between stock price and OBV.

After recording a low of Rm 0.48 in May this year, Perdana has been moving up steadily. Its has completed its sub-wave i & ii after breaking its upper trend-line. It is currently forming its sub-wave iii. Its next correction will be the sub-wave iv. Its next resistance is the Rm 1.16 level of its upper channel line. Perdana must break out of its down-trend channel to continue with its bull run.

However, if it failed to break the Rm 1.16 trend line, it is likely that its downtrend since its 2007's peak is not yet over. A likely wave count is as shown below, a 1-2-3-4-5 wave A formation.

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