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.
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