Petrofac: Last chance support line

1 mins. to read
Petrofac: Last chance support line

Every now and then we are reminded that blue chips are not always totally blue. Petrofac (LON:PFC) is the latest candidate to provide this warning.

Given how low shareholders are in the corporate food chain it is normally fair to say that if anything serious goes awry in terms of money or governance one would normally just have to put it all down to tough luck. This is particularly the case in terms of the small caps arena where a sizeable chunk of the contenders go belly up, or significantly underperform.

In the case of oil services group Petrofac, though, we seem to have had plenty of drama with the Serious Fraud Office involved and resignations/suspensions amongst key company staff. In fact, the best that can be said in the wake of today’s news of possible shareholder legal action against Petrofac is that some might consider the SFO’s involvement a sign of no wrong doing given how poor its track record is.

Looking at the daily chart, it can be seen how one can draw a trendline from the beginning of 2015 running through today’s 378p intraday low from which there has been a minor rebound. The view at this point is that provided there is no end of day close back below this feature, a dead cat bounce back towards the 10 day moving average, currently at 583p, could be seen over the next 1-2 months as a best case scenario. But one would stress this really is the best on offer and that below 378p spells real danger.

PFC chart

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