AI
Tuesday, July 31, 2012 4:49:19 PM
June close 3 cents July close 5.05 cents
Last month I said that TECO would close back over 4 cents but was off by several days. Earlier this month I gave a forecast of a close of 10 cents, and once again I was off on the closing print. I don’t know how many days I am off the mark I will be off this time but let’s take a look at the monthly trend.
In the depths of last month’s sell off we had an intramonth/intraday low at 2 cents, which matched up with the May 2011 nearly a year earlier. Following that low there was a rally up to 7 cent, and then a pullback and consolidation period until the January rally. This year we had a July rally into 7 cents, and a 50% retracement into a nickel.
It is very interesting how the stock price action seems to rhyme with last year’s moves. This time when the stock makes a move back up to 7 cents we should get a breakout and exceed my original projection of 10 cent price target.
TECO has numerous monthly technical factors going for it. First, there is a clear uptrend. The 20 month moving average crossed over the 50 month moving average and price is trading above both lines. In addition the support levels have been tested and passed with flying colors. Price never closed below 3 cents since the April 2011 rally and price only closed below 4 cents once since that time period and was followed by a pop to 7 cents.
The longer time frame is always the more dominant time frame and the monthly chart bullish consolidation pattern is clearly setting up a measured move that will take out the January highs before the end of the year.
The topic of today however, was the PR from this morning. There was some grumbling about why the stock is not rallying off of that news. The easy answer is two fold: First, big money only cares about actual production numbers and not projections on wells that haven’t even been spud in yet. Second, the bears did everything in their power to stuff the price today.
If you look at today’s press release we did not see a 100% increase in the Shelby lease BPD, we did not see a BPD number out of West Texas, and of course we did not see a BPD number out of Belize. What we saw with respect to production was what we already knew. The rest of the projections are very encouraging but until it translates into certified Texas RRC oil flow numbers I think that big money will be sidelined.
These folks who run 100 million dollar funds need to be extra careful about investing in a penny stock E&P play, even if it is just for 500,000 bucks. If TECO is going to go to 1 dollar next year a nickel a share is definitely an awesome deal, but 10 cents, hell 25 cents still is a very good deal. Big money long term investors are slow to get in but to our benefit should be slow to get out.
Without the volume from the big boys, the bears were able to stuff the breakout forming on the hourly chart today as it attempted to break through .053. All they had to do was sit on ask with a lot of shares and then start walking down. Then, in the last 5 minutes of trading they make sure that the monthly print doesn’t surge above a nickel by dropping 600,000+ shares into the bid.
With an average short position around 4.5 cents they closed the month down 11% unleveraged which means that they are probably down a minimum of 22% via 2 to 1 leverage on their position. I would not be surprised if they are down a bit more on 3 to 1 or 5 to 1 leverage. I don’t see how the survive another 4 weeks if price even stays between 5-6 cents, because the margin costs have to be eating them alive.
Lastly, in reference to yesterday’s post regarding A/S, remember I mentioned that the shares were used to buy income producing PP&E as in the Woodridge and Shelby acquisitions. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78010729
Take a look at Mr. Reid’s closing statements in today’s PR:
http://finance.yahoo.com/news/treaty-energy-corporation-finalize-shelby-133000950.html
“In closing, Mr. Reid stated, "Treaty is exceeding by far our projections for the near and long term development of our business. Other possible acquisitions are on the table that can add thousands of barrels of oil per day to the already huge production projections that we see coming from our many active drilling programs in East and West Texas and Belize."”
I would not be surprised to see more youtube videos in the near future of guy's bantering about their wives as barrels of oil sputter into a tank.
Last month I said that TECO would close back over 4 cents but was off by several days. Earlier this month I gave a forecast of a close of 10 cents, and once again I was off on the closing print. I don’t know how many days I am off the mark I will be off this time but let’s take a look at the monthly trend.
In the depths of last month’s sell off we had an intramonth/intraday low at 2 cents, which matched up with the May 2011 nearly a year earlier. Following that low there was a rally up to 7 cent, and then a pullback and consolidation period until the January rally. This year we had a July rally into 7 cents, and a 50% retracement into a nickel.
It is very interesting how the stock price action seems to rhyme with last year’s moves. This time when the stock makes a move back up to 7 cents we should get a breakout and exceed my original projection of 10 cent price target.
TECO has numerous monthly technical factors going for it. First, there is a clear uptrend. The 20 month moving average crossed over the 50 month moving average and price is trading above both lines. In addition the support levels have been tested and passed with flying colors. Price never closed below 3 cents since the April 2011 rally and price only closed below 4 cents once since that time period and was followed by a pop to 7 cents.
The longer time frame is always the more dominant time frame and the monthly chart bullish consolidation pattern is clearly setting up a measured move that will take out the January highs before the end of the year.
The topic of today however, was the PR from this morning. There was some grumbling about why the stock is not rallying off of that news. The easy answer is two fold: First, big money only cares about actual production numbers and not projections on wells that haven’t even been spud in yet. Second, the bears did everything in their power to stuff the price today.
If you look at today’s press release we did not see a 100% increase in the Shelby lease BPD, we did not see a BPD number out of West Texas, and of course we did not see a BPD number out of Belize. What we saw with respect to production was what we already knew. The rest of the projections are very encouraging but until it translates into certified Texas RRC oil flow numbers I think that big money will be sidelined.
These folks who run 100 million dollar funds need to be extra careful about investing in a penny stock E&P play, even if it is just for 500,000 bucks. If TECO is going to go to 1 dollar next year a nickel a share is definitely an awesome deal, but 10 cents, hell 25 cents still is a very good deal. Big money long term investors are slow to get in but to our benefit should be slow to get out.
Without the volume from the big boys, the bears were able to stuff the breakout forming on the hourly chart today as it attempted to break through .053. All they had to do was sit on ask with a lot of shares and then start walking down. Then, in the last 5 minutes of trading they make sure that the monthly print doesn’t surge above a nickel by dropping 600,000+ shares into the bid.
With an average short position around 4.5 cents they closed the month down 11% unleveraged which means that they are probably down a minimum of 22% via 2 to 1 leverage on their position. I would not be surprised if they are down a bit more on 3 to 1 or 5 to 1 leverage. I don’t see how the survive another 4 weeks if price even stays between 5-6 cents, because the margin costs have to be eating them alive.
Lastly, in reference to yesterday’s post regarding A/S, remember I mentioned that the shares were used to buy income producing PP&E as in the Woodridge and Shelby acquisitions. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78010729
Take a look at Mr. Reid’s closing statements in today’s PR:
http://finance.yahoo.com/news/treaty-energy-corporation-finalize-shelby-133000950.html
“In closing, Mr. Reid stated, "Treaty is exceeding by far our projections for the near and long term development of our business. Other possible acquisitions are on the table that can add thousands of barrels of oil per day to the already huge production projections that we see coming from our many active drilling programs in East and West Texas and Belize."”
I would not be surprised to see more youtube videos in the near future of guy's bantering about their wives as barrels of oil sputter into a tank.
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