Petro Matad (LSE:MATD) released an operational update on Monday and the share price rose 4% to 13.15p, but there has subsequently been some profit-taking since. The stock is currently sitting at 11.2p and looks to be approaching a support level at around 10.85p. Is this a buying opportunity?
The retrace could offer a good entry price for those on the sidelines although there have been two failed attempts to break the recent 14p high – often a share will retrace a little further in search of strong support after identifying a meaningful resistance level. Should this happen, 10p looks to be a decent shout, especially with a rising 200 Day Moving Average (DMA) approaching this level too. However, the share would then be in very oversold territory and that doesn’t really correlate with the current strong sentiment for the stock.
Wherever the support level is, the Relative Strength Index (RSI) has already dipped significantly on this retrace to provide headroom for a good run on the next upward move.
Author: Stuart Langelaan
Disclosure: The author does not own shares in the company mentioned in this article
