After a long rally, markets are topping out, risk is increasing, stock moving news for the company is likely to be months away and the stock is technically broken, so we can only come to one conclusion. While not a broken company (far from it), it looks like a broken stock, at least for the moment..
The overall markets are increasingly nervous and the risks are increasing:
- Oil rise as a result of political developments. This is a very unpredictable situation.
- China is cooling and its real estate investment is unsustainable.
- These developments come when the markets had a very nice run-up, which now looks tired.
So the overall backdrop is one of increasing risk. Then we think stock-price moving news at InterOil is months away:
- Energy World Corporation does not seem to be close to financing, at least the stock price isn’t indicating as such (despite a pretty hefty volume day today).
- More immediate news, like earnings, a GLJ resource update, and Government approval of building plans for the condensate stripping and modular LNG plants will not likely be big movers.
- Big, stock price moving news like take-off deals, farm-out agreements, FID’s on stripping plant and modular LNG, or resource sell-offs are likely to be months away.
And the stock looks distinctly wobbly from a technical point of view:
- It’s 20 and 50 day moving average broken on a move yesterday on relatively high volume
- The wedge which we noticed before, looks to be broken on the downside, not the upside