Pengrowth Energy Trust (NYSE:PGH)
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.
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.
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