ATH, Athabasca Oil Sands Corp., PetroChina and IPO,s

When you combine the tar (bitumen actually) sands, with the China factor (PetroChina –the word’s largest corporation – has a 60% interest in certain projects) and all the machinations that often are associated with IPOs – this being the largest in 10 years!- you get a marvelous cocktail of financial magic, hype and predatory pricing. In this particular case the bloom faded the very first day. The question now is simple this – if ,at the time , investors were willing to plunk down 1.35 bln. dollars at $18 a share would this not be a reasonable buy at $11/$9 ?? Just because the value was cut in half does not necessarily make it attractive but from an EW point of view things are looking decidedly more attractive. The dive can be viewed as one large A-B-C correction  -  the only fly in the ointment being that the recent bounce of the lows does not ( yet ) look very impulsive. Here is the chart;

ATH March 2010

Raymond James upgraded the stock today, which may or may not be an indication of renewed interest in this company. The RSI and MACD indicators both suggest a bottoming of sorts and perhaps the problems with the Gulf oil spill may help to make this business look (relatively) cleaner and safer. Last , but not least, buying at 1/2 price fits the  “buy low and sell high” mantra that, overtime , must be the single most important investment strategy. Regardless of whether or not the stock first goes to say $9, the target in EW terms, stays at about $15.