The last two months has been very good for the oil stocks of the Philippine Stock Exchange, particularly Phoenix Petroleum and Petron Corporation. Petron has exploded from a low of about 6.80 in November 2010 to a high of 17.40 in today’s trading, forming a pennant pattern on its way. Anyway, that’s a gain of more than 250% in less than two months! Wow. Similarly, Phoenix has risen from 7.00 to a high of 13.80 during the same time frame. After reaching the said high, PNX, however, has consolidated into pennant or a symmetrical triangle pattern. The question now is, will PNX break out the same way that PCOR did?
From a technical point of view, that’s very likely since trading action is already taking up about three-quarters of the pattern. So if PNX breaks the resistance of the pennant or the triangle, it could jet all the way up to 17.00-18.00 (gauged by projecting the height of the pennant’s pole from point of possible breakout).