Amazing Energy Oil & Gas Co. (AMAZ:OTCQX) finally succumbed to continued pressure from the falling oil price yesterday and dropped sharply, losing 19% at the close, but fell considerably more during the day. However, the surprising thing about this move is that it did no technical damage to the stock whatsoever—on the contrary, this looks like the final drop that marks the end of the correction in force from early last December. On its latest 7-month chart we can see what happened in detail, and how, even though it dropped 19% at the close, it had still recovered a lot of the ground it lost during the day, so that it ended the day with a bull hammer on its chart. This candle formed on high volume and the interesting thing is that most of this volume was buying that drove it back up again. We know this from the Accumulation line, shown at the top of the chart, which actually rose to new highs yesterday. Furthermore, the action yesterday was not a "one day wonder"—it was the last in a series of long-tailed candles going back to early April, where buying kicked in from low levels and dove the price back up. This is why the Accumulation line has been so strong. This price/volume action portends a breakout into a new uptrend, and it happen soon, given that yesterday's action is a clear sign of a final low.
The 18-month chart is very useful as it enables us to grasp the big picture of what is going on with this stock. It reveals that the correction in force from last December is actually the Handle of a large Pan & Handle base pattern. With June 4th's action indicating that the Handle of the pattern is at last complete, it should now proceed to turn up and break out upside in due course from the entire pattern into a bull market. While Amazing won't necessarily require a rising oil price to achieve this, its charts do suggest that the oil price will at least hold up and possibly continue to advance further, and right now oil is oversold after its recent drop and set to at least stage a bounce, which should help Amazing.
The long-term 10-year chart reminds us how cheap Amazing is historically, for as we can see it is still close to the bottom of a much larger base pattern that goes right back to 2009, and not shown on this chart is that it got as high as $37 back in 2006. The company has a reasonable 77.7 million shares in issue.
Amazing Energy Oil & Gas website.
Amazing Energy Oil & Gas Co, AMAZ on OTC, closed at $0.39 on 4th June 18.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.