Permiam Basin Royalty Trust (NYSE:PBT)

Q: Chip,

I only own  about 200 shares of PBT..  It has been on the down trent for some time, I have held on , but it seems it is hopeless and eventually it will probably  disappear on the charts.. Now its taken deeper drops,  question,  do you think, since you are monitoring this stock,  it might be worth holding on to longer?   Yield is now down to 5.52 %..  but stock value continues to drop farther..  I have lost over 40%.  What do you think?

A: The oil royalty trusts are very sensitive to the price of oil hence the near-term movement lower.  We issued a Downtrend on PBT on 6/22 at $11.36, just after the stock tried to reach its 200-day moving average on 6/11 but failed to get above that level.  The stock has since fallen to the lower 50-dy moving average and just yesterday broke below it.  The stock’s prior resistance was the $10 level which hopefully will provide some support during this cycle lower.  If it does, those moving averages will be of resistance above and the stock will likely trade with oil in the short term.  Earnings season is coming up so any good news there should help the price of oil as companies need energy to ramp up production.  The next few weeks will be key not only for PBT, but for the whole market.