We wish to highlight that Petra Energy has finally violated the RM1.30 major resistance. The stock's upside has been capped by this level for about 7 months. The first failed attempt to break above the RM1.30 level occurred in Nov 2011, followed by the second failed attempt in Feb 2012 and another such attempt just two months ago. During the last two failed attempts as portrayed in the chart above, the stock's trading volume surged as it climbed towards RM1.30, which implies that it had encountered heavy selling below this major resistance.

As the RM1.30 level has finally been taken out, and on strong volume too, we advise traders to accumulate shares of Petra Energy at above the RM1.30 level. The way in which the breakout occurred has also strengthened the buyers' conviction as the stock has created three higher lows prior to yesterday's breakout. From this trade, we are eyeing the RM1.63 major resistance as the upside target. Should this level be taken out, it may potentially test another major resistance located at RM1.72. An obvious cut-loss point lies at below the RM1.30 level since a price retracement back below this level would imply a fake breakout.

To the downside, look for immediate support at the RM1.30 level, followed by the RM1.27 and RM1.11 levels. Petra Energy's near-term technical outlook will be firmly bullish if it can stay above the RM1.30 level.

Source: OSK