Coastal Energy (£4.135) - A Thai Beauty?

Coastal Energy Company (AIM: CEO, TSX: CEN), closed up 38.5p (+10.3%) at £4.135 today, valuing the Company at £452.8m. This followed the announcement of successful drilling results at the Company's 100% owned Bua Ban North B field (offshore Thailand).

The 2 year shareprice action is shown below:

As you can see, since the reversal (6th - 8th February 2011), CEO has been in an intermediate downtrend. However, the news today and the resulting rise in shareprice indicates a break in that downtrend (see below):

Looking at the technical analysis, you will see that the OBV kinked up and that the stochastic indicator also broke up through the resistance line (marking the lower highs). The ADX +DI line also broke through the -DI line (although the fast [8day] ADX is at 24, whereas I normally like to see it above 25). The probability is that this marks the start of a new uptrend.

It looks as though the TA is in tune with the fundamentals on this stock, making it a buy! What do you think?

Do please let us know your views. Mick.