Energy & Mining

Oil Price Bring Traders to Torchlight Energy Resources Inc (NASDAQ:TRCH)

Torchlight Energy Resources Inc (NASDAQ:TRCH)

Torchlight Energy Resources Inc (NASDAQ:TRCH)

Torchlight Energy Resources Inc (NASDAQ:TRCH) shares are up over 7% to $1.49, and trading on a volume that is over 11 times their 30-day, daily average. Shares may be moving higher on the news from the European oil markets that the price of crude oil is rising in an environment where additional production is far from a certainty.

Ten-day chart for TRCH stock:

Torchlight Energy Resources Inc (NASDAQ:TRCH)

Plano, TX-based Torchlight Energy Resources Inc (NASDAQ:TRCH) is a high-growth oil and gas exploration and production (E&P) company with a focus on acquisition and development of highly profitable domestic oil fields. The company has assets focused in West and Central Texas where the company targets established plays such as West Texas’ Permian Basin and Eagle Ford Shale.

On October 18, Torchlight Energy Resources Inc (NASDAQ:TRCH) provided an update to the flowback process underway on its Flying B Ranch #3H well. At that time, the company said it was producing ~2500 barrels of fluid per day and experiencing increasing oil cuts and gas production. Most recent measurements reflected an oil cut of roughly 6% reaching ~150 BO/d and 30 MCF/d.

TRCH Stock Performance

TRCH shares have done well this year – up over 36%. However, this week alone the shares have skyrocketed and are up over 27%. That move pushed their Relative Strength Index (RSI) figure above 70 to 75. Accordingly, they are now trading in an area (above 70) that many traders consider to be in “overbought” condition, but given the recent upward trajectory in global oil prices, more may be left to the upside for this energy stock.

As demonstrated by the increase in share volume, traders may be moving quickly in this stock to capture any quick moves. Long-term investors have been rewarded but they also are skittish of the fact that Torchlight Energy Resources Inc (NASDAQ:TRCH) had increasing per share losses from 2012 through 2015 when the company posted a loss of (-$1.56) per share. That loss shrank to (-$0.18) for 2016. Another area of concern for long-term holders is the shareholder’s equity dilution. In 2014 15.73 million TRCH shares were outstanding. That number increased almost three-fold by the end of 2016 to 43.12 million.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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