Fig 1: Oando Plc 6-month chart
Source: FT Markets Data
Oando Plc which was one of the laggards on the Nigerian Stock Exchange (NSE) last year has rebounded with a spectacular run that has seen it gain 97 percent this year alone.
The catalyst for the run is largely unclear, although Oando Plc did manage to squeeze out a profit in the First Quarter of 2017 after the impact of N1.2 billion in tax credits.
This compares to the dismal N15.3 billion loss the firm reported for Q1, 2016.
There was also a big jump in revenues for the period primarily led by the Supply and Trading segment and Exploration and Production (E&P).
Fig 2: Oando 200 DMA chart
Looking at the technical position of the stock, the 200 day moving average is acting as overhead resistance in our 5 year chart.
Investors who have missed this move so far may want to wait till the stock clears this overhead barrier before plunging in.
Fundamentally though Oando remains bogged down by huge debts and is looking more like a pure upstream play.
The firm spent N10.6 billion on finance costs in Q1, 2017 alone even as 99 percent of profits came from the E&P division.