Chart of the Day: Here’s Peninsula Energy (ASX:PEN) eyeing a 25pc break up
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Uranium stocks seem to be getting the best of it right now and a name that flies somewhat under the radar in the space is Peninsula Energy (ASX:PEN).
Of late it has been less likely to capture the explosive moves of some of the more prominent names in the sector like Paladin, Bannerman or even more recently Boss Energy, but it is making progress nonetheless, as the below chart clearly shows.
Back at the start of March there was a significant test of the 200-day simple moving average which held well across 10c.
That level also held in June of 2020, and again provided support in late 2020 before the move to recent highs at 18c.
If Peninsula can clear 14c again, then a retest of 18c looks to be on the cards, especially with the shorter-term moving averages starting to converge just below current prices.
There are also supports on the chart between 10 and 12c, and a trader buying today at around 13.5c would not have a huge incentive to risk below 12c, unless one wanted to take a more medium term or structural view on the name or the sector.
As Peninsula’s primary interests are in the States, it also comes with the perception of an easier jurisdiction in which to operate compared to some of its spicier peers.
Energy is generically at the forefront of the ‘reflation’ trade in recent months, with gas stocks and other energy alternates dominating the movers lists of late.
Whilst we do not currently own Peninsula, it is certainly on the watch list as a stock which we would like to acquire.
A close at 14c or better could be the impetus.
Steve Collette of Collette Capital Pty Ltd (ABN 56645766507) is a Corporate Authorised Representative (No. 1284431) of Sanlam Private Wealth (AFS License No. 337927), which only provides general advice.
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