Pengrowth Energy Trust (NYSE:PGH)

Q: Chip, I am an investor in Pengrowth Energy Trust (PGH) and was reading the news about it turning bearish.  Would you know why this is occurring?  I like PGH and do not want to see it dropping out of my portfolio. A: The oil royalty trusts are very sensitive to the price of oil hence the near-term downward movement.  We issued a Downtrend on PGH on 6/23 at $7.69, just after the stock fell below its 50-day moving average.  The stock tried to rally a few days later but has since fallen below that 50-day average support line.  The next area of support is just above $6 where it traded for some time for the month of April.  I would watch that level closely.  Having gone from $4.60 to $9 in just about 3 months, some retracement was inevitable.  Especially after it couldn’t get above that 200-day moving average on June 1.  In the very short term, its likely to trade closely with the price of oil and, as you know, crude has gotten above $70 and is now only just above $60, down 4% today after inventories came out.  The trusts are highly levered to these day-to-day movements of oil prices.