Caltex 16/6/99

Caltex spent most of 1998 attempting to convince the market that its convenience store network would deliver added growth in the face of a weak outlook for crude oil and petroleum products.

The chart shows that "the judges" were hedging their bets. A triangle formation often forms around such times: the battle of buyers and sellers.

Note triangles are usually continuation patterns, though the attempted break to the high side early 1999 certainly continues the stockmarket tradition of not making it easier for us. It was just after this that CTX downgraded its profit forecast - released to the market June 8th. CTX had been moving down the weeks prior to this. (Broker reports had been speculating the profit down grade since early May )

Caltex has a good yield; six and a half percent fully franked at $3.41. Charts can help us time a purchase if we were chasing yield: no need to buy whilst the price is still below the moving averages.

The next support level for CTX is $3. A move to this level is indicated in the chart. $3 would indicate better buying levels, at least temporarily.