Chemoil

2009Oct-Chemoil US$-640×506

Chemoil has broke its 0.555 resistance with high vol and managed to close at 0.555 which is its resistance turned support level. With MACD cutting, I would expect share price to test 0.57 resistance, which shouldn’t be to big a problem to break. After which, we should be able to see it move to 0.635, its 61.8% fibo level. As Chemoil is traded in USD, it will be attractive to buy it as USD is relatively cheap now. It has also been trading in a very nice upward channel for the past 6 mths too.

Technical Buy with TP US$0.635

My Trading strategy:

Entered on breakout today at 0.555
Cut loss if it breaks below 0.525. Might sell Half when hit 0.57 and keep leftover for it to break 0.57. Use profits as buffer for the remaining 50% in case it doesn’t manage to break 0.57.
Caveat Emptor

More on their business:

Main core business is marine fuel trading and controlling all key stages of the marine fuel supply chain. A very good oil play counter. Multi Billion revenue company, with revenue doubling from 4b from 2006 to 8b in 2008. Furthermore, they have been in talks for a takeover by bigger Oil companies. A very attractive company with potential takeovers with their strong presence globally and strong stream of revenue. Big oil companies who are expanding into the bunkering area might target them.