bng_chart.pngBengal Energy Ltd (TSE:BNG) (PINK:BNGLF) remained stuck near a major support on Tuesday, unable to find a direction for share price despite the heavy trading.

BNG share price is still pressed against support at $1.46 after the downtrend halted in the beginning of May. A heavy trading volume was recorded yesterday as 750 thousand shares changed hands – that was more than 4 times above the 90 day average of 174 thousand. The increase in trading activity however was fruitless price-wise.

As history shows, BNG stock often displays heavier than average trading, but rarely is it associated with an adequate price action. Such a behavior makes the stock more risky as it doesn’t follow the widely accepted patterns.

No news were issued recently which suggests that the consolidation period will likely stay unchanged for a while.

bengal_energy_logo.jpgThe current market value of the company is pretty much what it should be – $55.5 million. The book value should be around $41 million right now, including the recently closed funding. That gives a price to book ratio of 1.35 – a standard value for junior mining businesses with insignificant revenues.

A major issue with the share price is the dilution rates. The $25.5 million bought deal financing closed in April brought about 47% dilution to shareholders. The historical dilution rate over the whole year 2010 was around 66%.