RH Petrogas’s share price doubled in two trading sessions to 20 cents on June 14. A long white candle on June 15 was followed by a doji and a shooting star, suggesting that short term up-momentum is fading. In the meantime, short term negative divergences have been building. Prices may not be better than the shadow of the doji at 21.5 cents. Support and breakdown is at 17.5 cents.
RH Petrogas is a company with negative equity despite reporting a profit of $3.36 million in 1QFY2021. The reason for turning in a profit was partly due to higher crude oil prices and partly higher crude oil production. Interestingly, its average selling price in the first quarter was US$59 ($78.99) per barrel. North Sea Brent is currently priced at around US$73 per barrel, and West Texas Intermediate at around US$71 per barrel.
When asked about unusual trading, the company said that it receives proposals from time to time for possible mergers and acquisitions, joint ventures and/or strategic alliance opportunities.
