Too late to get into InterOil?

Some people keep asking, should we buy more, is it too late. It might surprise you, but we were actually a little hesitant, for the short-term, that is. Why?

Well, it’s a question of two opposing forces. News (results of DST3) will be out shortly that is very likely to be good. It could even be very good (very high pressures, oil..). However, from a technical point, IOC is already overbought, or so we thought.

We last looked at the chart before that curious spike to 41, which was caused by some big market order (combined with an unscrupulous market maker). Now, it’s funny, but that big order actually considerably improved the technical situation. Look at the chart:

It’s really quite curious. Without that single order, we would have been in overbought territory now (we were already close on Wednesday). In itself, stocks can remain in overbought territory for quite some time, but in most normal circumstances, after the news has been taken in, sooner or later some technical correction ensues.

So, we think there is still time to load up a little more. One thing you have to realize though, although it’s not terribly likely, the next DST could also disappoint. Although we think that with the two previous successful DST’s, much downside risk has been removed, investing in stocks is never a sure thing though.