Here’s Why Pacific Ethanol Inc (PEIX) Is Trending Higher Today

Pacific Ethanol Inc (NASDAQ:PEIX)‘s stock has been on a steady decline since mid-May losing about 37.2% of its value. However, the stock was gaining traction today ahead of the release of its financial results on Wednesday, and had risen by almost 10% by midday and then retracted to around 3%. The company is expected to deliver an EPS of $0.09 and revenues of $265.22 million for the second quarter.

Considering that Pacific Ethanol Inc (NASDAQ:PEIX) is trading just 8.9% above its 52 week low, concerns that the stock might be oversold could be one of the reasons why the stock is trending higher today. In fact, from the perspective of technical analysis this hypothesis is confirmed by the Relative Strength Index (RSI), which stands at 28.68 for Pacific Ethanol Inc (NASDAQ:PEIX) signaling an oversold range. Whether this is just a dead cat bounce or the beginning of a prolonged upward trend for the $308.10 million leading producer and marketer of low-carbon renewable fuels in Western U.S. will be more clear after Wednesday.

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As far as the moves of professional money managers are during the first quarter are concerned, Pacific Ethanol Inc (NASDAQ:PEIX)’s prospects look promising. Among the hedge funds that we track a total of 20 funds had an aggregate investment of $64.48 million in the company at the end of March, up from 17 firms with $58.75 million at the end of the previous quarter. The stock was trading nearly sideways during these three months.

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Insider trading is another useful indicator that reflects the management’s take on the company’s future prospects.  However, unfortunately no such activity has been detected in Pacific Ethanol Inc (NASDAQ:PEIX) so far this year.