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Finding New Energy With Ivanhoe Energy

11/30/09 10:24:16 AM
by Koos van der Merwe

Albert Einstein said, "Energy can not be created," so finding a new source of energy is always profitable.

Security:   IVAN
Position:   Buy

It is winter, and soon if not already the snow will be on the ground. Houses will use energy of some kind to heat up. Motor cars use energy in the form of gasoline at the filling station. Electricity that lights up a city is energy. So a company looking for and finding a new cheap energy source is always a company worth looking at. So why is Ivanhoe Energy showing a buy on my charts?

In mid-November 2009, Ivanhoe Energy held a conference call to discuss a transaction with PanAsian Petroleum, and the development of Block XVI in Mongolia. So why did this news item trigger a buy signal? As technicians, we must look at charts and try to figure out how feasible that buy signal is. Obviously, someone is buying the stock, someone who knows something. Let us look at the chart.

Graphic provided by: AdvancedGET.
Figure 1 shows the following:

-In December 2008 to May 2009, the stock formed a cup and handle formation suggesting a target of $2.90 (1.63 - 0.36 = 1.27 + 1.62 = 2.90).
-The stock price rose to $3.02 before falling back.
-The stock has now formed a triangle suggesting a new target of $4.67 (3.02 - 1.37 = 1.65 + 3.02 = 4.67).
-Volume was high as the stock price approached the target of $2.90, and again when it reached $3.02, and has fallen back to low levels as the stock price rose and fell.

Ivanhoe Energy has been a disappointment in not improving its share price from the inception price of $4.12. It made promises that petered out; however, it could have found its feet. This is a stock worth nibbling at for a hopeful 86% profit, as long as you don't wake up at 3am worrying.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address:

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