Sinopec (386.HK) Remains Under Pressure Despite a Promising 3Q Result

Sinopec (386), an oil and gas company, announced that 3Q net income jumped to 46.2 billion yuan from 12.0 billion yuan in the prior-year period on revenue of 520.4 billion yuan, down 29% on year.

Charts (6)

Sinopec (386), an oil and gas company, announced that 3Q net income jumped to 46.2 billion yuan from 12.0 billion yuan in the prior-year period on revenue of 520.4 billion yuan, down 29% on year. Then, the stock bounces 1.3% after the 3Q result.

However, the stock dropped 35% YTD, while the Hang Seng Index was down around 10% YTD. It shows that the stock is at a very weak position. Besides, the WTI crude oil futures slumped 5.6% yesterday, reaching the 4-month low, on the soaring of coronavirus cases. The decline of oil prices would have a negative effect on the company as well.

From a technical point of view, the company is trading below the overlapping resistance level at HK$3.23 on a daily chart. Both 20-day and 50-day moving averages are still declining. As long as the resistance level at HK$3.23 is not broken, the stock could consider another down leg to the support levels at HK$2.95 and HK$2.70.

However, investors should be aware that the RSI is posting a bullish divergence signal. A break above HK$3.23 would trigger a rebound rebound to the next resistance levels at HK$3.43.


Source: GAIN Capital, TradingView

More from Equities

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.