Vast Exploration Inc. (CVE:VST) (PINK:VSTFF) stock gained over 33% over the last two trading sessions. The jump can be associated with early rumors and anticipation of drilling update, that was actually published later, and allowed to sustain the price gain for longer.
The next price resistance is roughly at 73-74 cents. RSI shows the stock quickly entered overbought position and might be up for correction. The trading activity doesn’t look very trustworthy as well. Part of the heavy volume possibly came from short squeezes, as there was an extended preceding downtrend, which lured in short sellers.
Update on operations didn’t provide much rejoice either. The company revealed drilling progress on the Qara Dagh property, stating that over 2.5 thousand meters were drilled down on the 1 exploration well. The drilling was delayed by difficult geological conditions and apparently there are no further results to report at the moment.[BANNER]
Fundamentals could justify the current share price. There is very little debt, and at the moment the market cap is only twice the net worth of the business. However, with no revenues and deteriorating cash position, the outcome doesn’t look very promising in short term.
All in all, the stock is likely up for correction unless more ground shaking news come out. 55 cents area is where the first significant support can be found, and it did hold off the depreciation for roughly a month back in October 2010.
