NOL - Likely more near-term upside

NOL is likely to see more upside potential in the days ahead following the formation of a bullish engulfing pattern when the price rebounded off the intersection of the 50-day MA, 100-day MA and the upper boundary of its 6-month downtrend channel.

With the Stochastic indicator making a positive crossover just above the oversold region recently, coupled with strong rebounds off their 1.5-month uptrend lines by both the RSI and OBV indicators, our view of a likely near term recovery is reinforced.

We expect the recovery to find an initial resistance at $1.52 (200-day MA resistance and Apr ’09 high), breaking which, we could see a possible test of the subsequent resistance at $1.81 (support-turned-resistance level) - Immediate support is pegged at $1.13 (recent trough), ahead of $0.90 (minor troughs from Oct ’08 – Dec ‘08)

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