Back on March 7 I bought into Petro China at $112.05. The oil sector was booming and the DOW had just come out of one of the worst days in history. We lost 250 points in one day over a China "Scare". PTR got hit hard and I saw this as an opportunity.
This stock had been on a straight line up since it came public. What were the chances of it reversing? How much lower could it go than this? It had just broken through the 200 day moving average on significant volume because of the China thing. Usually I would see this as a negative sign, but on a stock that had been going straight up like this, It just looked cheap!
Quickly we went up and bounced off the 200 (#1) but the support held on the way back down (#2). When it busted through the 200 about a week later(#3), I knew I was in the right place. All we needed was a catalyst to send this stock higher.
On May 5th the Chinese government announced that they "found" a ONE BILLION TON oil field off the coast (#5). Hey!? Where did that come from?? The stock shot up $15 to $129.80.
I was looking for about a 10% gain and there it was. I sold off on May 30th at $127.85 because I wanted to book the profits. Yesterday PTR closed at $142.65 a cool $12 up from where I sold it only a month ago. This morning PTR opened at $150 on some news about it selling its shares on the Shanghai exchange.
Looking back I could have easily made 20% on that trade instead of 10%. Why did I sell? They had just made an incredible "discovery", The stock just exploded past the 200 and 50 day simple moving averages and the MACD just converged positive. Sometimes its better to just be patient and re-analyze the stock before pulling the trigger on your plan.
