Hope all is well with you. Any chance I could get you to shed some light on Connacher Oil and Gas? Will this company stay alive to fight another day based on the current price of oil? Anything you could offer would be greatly appreciated.
Thanks in advance.
All is going well with me and mine as I hope is the case with you and yours! Thanks for asking and for the assignment. This will be the third time since 2010 that I examine the evidence concerning Connacher Oil and Gas Limited. The last time was September 26, 2011 when the shares were trading for $0.49. Andrew had bought in at $1.20 and wanted some input on how to proceed. He asked if he should average down on his speculative investment which I advised against. My general rule of thumb is that you chase your winners with new money not your losers.
The research depicted a stock in a free fall and it was recommended that CLL was a candidate for a tax loss sale before year end. By October 3, 2011 the shares hit a low of $0.24 but from there they staged a rally to $1.09 by January of 2012. The object lesson from the study had to be a commitment to constant and vigilant surveillance of assets at risk in the market. Another inspection of the charts will help identify how to manage CLL.
The three- year chart indicates that the stock held support at $0.20 from June of 2013 through mid August 2014 but that was the end of that tune. The stock was riding on the same bus as the rest of the energy sector and got sideswiped by falling oil prices. A death cross surfaced in August of 2014 alerting investors that sellers were taking control of the market. CLL is currently negotiating with its creditors for a $1 billion swap converting debt to equity which will further dilute existing shareholders. The decision on that proposal is expected in April.
The six-month chart tells the tale of woe that has befallen investors who have been true believers. CLL has offered lots of opportunities to trade for profits but has been brutal to buy and hold investors. There are no signals at present that we can expect a trend reversal in the near future.
Make it a profitable day and happy capitalism!