Torc Oil and Gas Ltd. no evidence of a trend reversal

Sep 2nd, 2015 – 1 Comment

Suffering with the sector since last June


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TOG LOGO

 

Hi Lou,

I would like your opinion and analysis on Torc Oil & Gas.

I always really appreciate your comments.

Thank you.

Lori

 

Hey Lori,

Thanks for the assignment and your kind words. Both are greatly appreciated. This will be the first time that I conduct a study of the charts for Torc Oil and Gas Ltd. (TOG TSX). Management has embraced the mission of providing a sustainable monthly dividend by growing its reserves, production, and cash flow, cost effectively. The dividend yield of 9.06 % has to be viewed as extremely generous in the current environment and has arisen as the price of the stock has fallen.

A probe of the dominant patterns on the charts will provide the basis of my evaluation.

 

 

TOG

The three-year chart depicts a stock that has been selling off since it traded near $15.00 in June of 2014. The selling of the shares that started at that time was coincident with the decline in oil and natural gas prices that has persisted until just recently.

Make note of established downtrend line which has provided resistance to attempts to move higher. The leg up that started in January of 2015 and came to an end in April illustrates the point. The MACD and the RSI generated sell signals at the same time as TOG retreated from $11.00 and raced to a 52-week low of $4.41 in late August of 2015.

 

 

TOG2

The six-month chart highlights the resistance along the 50 and 200-day moving averages through May and June and the death cross that formed in July. The MACD and the RSI signalled a buy as TOG moved off the 52-week low. The next level of resistance that should be on your radar on this bounce is $6.50.

I would be cautious with the handling of this stock. The bounce off the 52-week low and the dividend yield of 9.06% are interesting but in the face of the multiple bearish patterns identified I would not expect a trend reversal in the near term.

 

Next time I will examine Whitecap Resources Inc. (WCP TSX) for Marni.

 

Make it a profitable day and happy capitalism!

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