Obviously, 2011 is not a strong year for the energy sector. A huge number of energy companies, including Canadian oil and gas firms, suffer losses on the stock markets. It seems the bottom was touched in the last several days when many energy stocks fell to their 52-week lows, some of them even noted all-time lows.
Contact Exploration Inc. (CVE:CEX), (PINK:CXLIF) is no exception from this unpleasant trend. In the last September session, the shares set … a new 52-week low on the Canadian market. Not the best way to finish up a month.
It is not as bad as it seems, though. On Friday, despite falling to $0.10 during the trade, CEX actually formed a black spinning top. It represents high indecision between the bulls and the bears. Observed after a long decline, this candlestick pattern might imply a potential change or interruption in the negative trend. Its reliability, however, is low as it reflects just one day trading.
Friday’s session was hot, indeed, and will be remembered not only with the new low but with the unusually large trading volume as well. Approximately 3.2M shares changed hands in a fierce and competitive battle between the buyers and the sellers. Such turnover exceeds almost 20 times the average for the last thirty days, and is a trading record for 2011.
We shall see whether the latest company developments might support the stock’s progress in the near future. In the end of September, Contact Exploration released unaudited financials for the second quarter of 2011. They reveal:
- A decrease in the cash position, in the total current assets and in the working capital as compared to the preceding quarter of 2011;
- A net loss of $169K, compared with a corresponding loss of $676 for the Q2 of 2010;
- Petroleum and natural gas revenue has more than tripled over the second quarter of 2010, jumping by 223%.
Additionally, a few days ago Contact announced initial results from its vertical Hopewell Prospect in New Brunswick. As the corporation claims, they confirm “the significant presence of hydrocarbons (oil).”
Hopefully, these events could help the stock climb up at least to the 50-day simple MA, which is at present at $0.15. Currently, with CEX priced at $0.12 per share, Contact Exploration has a market cap of $17.46M and looks undervalued.
