Monday, June 21, 2010

Chart of the Week: New Zealand Refining Ltd

Chart forNew Zealand Refining Co Ltd (NZR.NZ)

The aim of this series of charts is to show the divergence - up or down - of the selected individual stock price away from the NZX 50 Index. The chart is a 1 year look to give some relevant background to any recent (two to three months) share price movements.

New Zealand Refining Ltd [NZR.NZ] has had a poor last year share price wise and 2009 half year result.

Over the last two months though the stock has dropped from around $3.80 to close at $3.10 at close of market last Friday. The NZX by comparison has been almost flat.

The current NZR share price is at a 52 week low after being at a high of $7.65 over the same period

If you were a chartist you would say this stock has been over-sold and is ready for a correction.

The company has been affected in the short term by lower refining margins, increased capital expenditure and a suspension of the dividend. This is unlikely to continue for the long-term and the first sign of a resumption in dividend is likely to see this stock surge in price.

Significantly the stock has a $1.92 per share asset backing.

Buy on further weakness or at present levels.

Chart of the Week Series

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NZR @ Share Investor

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