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I've been reviewing the press releases and looking at the recent SEC filings. Back on April 12th, according to an 8K sec filing, OREO got a little busier moving forward with its plan to drill for oil in Nevada by amending a drilling agreement with a drilling company concerning 5 oil and gas leases in two Nevada counties.
While it's clear from the most current quarterly financial statement funds will still have to be raised to move this process forward, the market absolutely loved the event, and the stock has begun to trade gigantic volume on the heels of this news. Who knows what's coming up next that could provide the next surge.
If you jump back to the Sunday, November 13th edition, you will see I first covered the company by providing a little background on the history of oil drilling in the US, and suggesting we might be getting back to a "Jed Clampett" type environment with oil pegged over $100 per barrel, and energy independence on every politician's "to do" list. (or, in the case of politicians, to promise to do something).
As you can see from the OREO chart, just five trading days ago, OREO absolutely exploded with volume, trading 900,000 shares, then over 2 million, 3.6 million, and 665,000 on Friday. Wow- that's some interest from nowhere.
There are times when the stock tells you more about what's happening with a company than the company does, and judging by the way this stock is behaving, something could be afoot.
Since the stock surged to $1.90 this past Wednesday, and has pulled all the way back to $1.43 (the perfect 61.8% Fibonacci Retracement I love), there might be a trade in this one back to the upside as traders who feel like they missed the first big run take advantage of the temporary weakness.
It's worth noting- in this past Thursday's edition entitled "Changing Our Diapers", I put up a chart of Luxeyard (LUXR) and showed the 61.8% retracement level to be about $.77. The stock closed at $1 on Friday, yielding a 30% gain in two trading days if you had the courage to jump on the stock when it sold off rather violently.
On a purely technical basis, I suggest you traders take a hard look at OREO for a bounce as well. For a trade, I would suggest taking a position up to $1.50, with a suggested stop loss of $1.36- which was Fridays's low trade. If it goes below $1.36, it's likely to go lower.
Also, there's no reason it couldn't bounce back to the Wednesday high of $1.87, and then perhaps move higher. $2 could be in the wind short term. The stock is trading as if there's something substantive coming down the road, and if so this pull back might be heaven sent if you're looking for a trade in OREO.
A reminder: Catch me live on TV every Monday from 12 to 2PM eastern.
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