China North East Petroleum (NEP) sell-off, but hindsight is so 20-20..
A rapid rise, overbought, the top of the trend-line, all pretty good give-aways for some serious pause, that turned into a sell-off this morning when the Chinese increased their interest rates. We hope to have more on this company soon. It presently sits at $7.10, about where its 200 day moving average is (although that average hasn’t been ‘moving’ all that much because of the trading halt). We expect consolidation to last a while but it remains an interesting situation which we watch carefully.
We think that a company of which the shares trade at 5x net profits and 4x cash-flow remains pretty interesting, especially considering the sector it’s in and the investigation which is now completed and didn’t reveal serious misdeeds.