Pason Systems, a leading energy services and technology company, has stood out in the energy sector, which has otherwise struggled. PSI.TO re-entered the Favored Green Zone of the SIA S&P TSX Completion Index Report in early June, as it challenged and ultimately had a breakthrough of long-standing resistance at the $16 level, dating back to 2015. With a robust performance in 2023, PSI.TO delivered impressive returns of nearly 65% over the past year, accompanied by a year-to-date return of 15%. Given these recent developments, it's now prudent to reassess our charts to identify new support and resistance levels, as well as potential entry points for new investors. When focusing on the daily chart for shorter-term insights, investors might be excited with the recent breakout above $16 but after a measured move its always best practice to zoom out a little. Seasoned investors will review weekly and monthly charts for long-term resistance that may unexpectedly materialize. Looking at the weekly chart of PSI.TO this exercise has provided good perspective into Pason's potential risks along with a potential upside technical target.
In the fall of 2018, a resistance point just above $19, marked by a shooting star candlestick pattern (see circle), halted the rally, and shares ultimately descended to $4 over the following two years. The past four years have been more favorable, with shares rebounding to $19 from 2020 low, yielding significant returns for investors. While long-term holders (2018) may now breathe easier with their investments no longer underwater, their sentiment toward the company remains cautious as they recover losses. With robust relative strength, PSI shows potential for further gains, though history serves as a reminder and investors will be smart to respect $19. Purchases near $16, supported by confidence in strong long-term support at $13, appears prudent. Watch closely as holders at $19 choose to exit or remain; paving the way for PSI shares to target its all-time high at $24.72.
The point and figure chart paints a similar picture with the obvious zone of support (old resistance) at $15.99. Note the long-term support also at $12.86 and excellent trend line support at $12.12, with of course minor 3-box support at $16.97. Resistance is observed dating back to 2015 at $19.49 and all-time high at $24.72. With a bullish SMAX score of 10 out of 10, PSI.TO is exhibiting strength against the asset classes.
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