Trading Pattern.What does the pullback in price mean to the average investor. Let's see what happened, there was a huge push in the market to raise the price above
.50, and that combined with hitting on the first 4 wells, allowed them to hopefully raise capital at
.50. Then what happened. With low volume, the price has steadily pulled back with offers increasing and no buying from those who pushed earlier. Reasons? First, are the brokerages doing the financing allowed to be active in the market during the "quiet" raising capital period. I don't know the answer to this question, perhaps someone else can. Second, the 5th well missed, so there was likely some selling in response to this, eventhough 4 out of 5 is a pretty good record. Third, the language in their last release indicating renewed drilling leading to production but not until later in the 3rd QTR, perhaps even longer (likely just enough time to allow all the private placement to become free trading - not a bad idea, then the warrants will likely get exercised putting more capital into the company).
Is this a buy around the
.40 range, or wil this continue to go lower into the
.30 and even perhaps into the
.20 range. There has been a lot of buying above here so I suspect the consolidation range is in the low
.40 range.
There should be more news coming about production tests in well number 2, hopefully this is good, and if not, we are definately heading into the
.30 range with any bad news.
Good luck.