You may recall that we took a nice profit in Jericho Oil Corp. (JCO:TSX.V; JROOF:OTC) back in January, selling it right at the top. The company continues to be liked for its intrinsic strengths, but nevertheless it looked set to react back significantly and it has.
When we sold it we figured that we may buy it back on such a reaction. Thus it is interesting to observe that after a further loss a large high volume bull hammer appeared on the chart on Friday, with its intraday low right at the support line. This is a sign that it has hit at least a temporary bottom, and with the larger uptrend still in force as shown by the moving average alignment, it looks like the time has come to buy it back, especially if it should dip towards the low of the hammer, and a close stop may be set beneath Friday's intraday low, just in case it doesn't hold.
Conclusion: Jericho is rated a buy again here, especially on any dip towards Friday's intraday low, with a stop just beneath it, say at C$0.685. The larger outlook for the oil sector remains grim, this is a trading setup particular to Jericho.
Jericho Oil website
Jericho Oil Corp, JCO.V, JROOF on OTC, closed at C$0.76, $0.586 on 2nd March 18.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.