The decision to take profits on at least half of our holding in Torchlight Energy Resources Inc. (TRCH:NASDAQ) on 23rd February turned out to be a good one, because it lost nearly 40% of its value peak to trough on the heavy reaction that soon followed. Actually we were a day early taking profits and would have got a better price the next day, but it was still the correct decision. So, we got the expected reaction, but we are going to be a day late buying it back, because it turned higher on Friday due to investors being stoked by the company announcing before the open on Friday that it would be hosting a conference call on 22nd March to discuss the Orogrande Basin project, and as you may recall this is an exciting project because Maverick Operating has determined, on Torchlight's behalf, that there is a significant hydrocarbon system in this basin.
So we can expect investor interest to build ahead of the conference call, and if the call gets investors excited we may even see a spike in the share price immediately after (which we of course would sell into). Our 3-month chart below shows that Torchlight is nicely set up for another run that could easily take it well past the February peak—it is just above a quite strong support level with additional support from the rising 50-day moving average coming into play, and we have just seen a bullish moving average cross, and the earlier overbought condition that prompted us to take profits has unwound.
Torchlight is therefore rated a strong buy again here, and those who sold part of their holdings earlier near to the February peak as advised can buy back here.
Torchlight Energy website.
Torchlight Energy Resources Inc, TRCH on NASDAQ CM, closed at $1.36 on 8th March 19.
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.