CGX Energy, Inc. (CVE:OYL) (PINK:CGXEF) gapped down more than 17% on Thursday on no particular news announced, which leads to think a large-scale stock dump occurred.No record of insider transaction can be found on public sources, thus it could have been institutional sellers that got the price to tank. However, the amount of stocks owned by institutional holders is not disclosed anywhere.
The unclear nature of this gap down could lead to price bounce, since common gaps have a tendency to be filled in short. In this case, the space left is for a nearly 15% upside action.
The more intriguing chart pattern, however, could lead to further collapse. Double top can be seen forming over the past 4 months. At this point, OYL share price has already touched the important support level at 85 cents. A couple of additional support levels can be seen below though, so even in case of a collapse the price likely won’t be very quick to go through them. The 80 and 70 cent levels are the most prominent front lines from a technical perspective.
The gap occurred on the strongest trading volume recorded since the company’s inception. This might lead investors to reconsider their positions and CGX Energy can’t really brag about its performance:
• Only minuscule revenues recorded since inception
• On average $4 million lost every year due to costs of operations and compensations
• Constantly issued new stock to raise capital
• Little progress on properties over the last 5 years
Indeed, the last serious update on the operations dates back to 2005. Fund-raising news and small scale event announcements dominated OYL’s profile since.
