Oando Plc, a Nigerian energy company, rallied from a record low after announcing the start of production at one of its wells and as a technical signal indicated the stock was oversold.
The stock gained 5 percent to 11.55 naira by 12:46 p.m. in Lagos, Nigeria’s commercial capital. The shares reached a 14-day relative strength index of 27.7 when they last traded on Oct. 24, before the market closed for two days of holidays. A level below 30 signals to some technical analysts that the stock is oversold and set to gain. The RSI was 38.4 today.
“The stock was oversold, so on a technical trending, it appears attractive to traders,” Pabina Yinkere, Lagos-based of Head of Research at Vetiva, said by phone today.
The Ebendo-4 well, in which Oando Energy Resources, a unit of Oando, has a 42.75 percent working interest, has started production at 2,000 barrels per day, the company announced on Oct. 23.
Oando shares have fallen 48 percent this year, compared with a 30 percent rise in the Nigerian Stock Exchange All-Share Index.