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Oil drilling near Grande Prairie, Alta. (Rob Ganzeveld/Rob Ganzeveld)
Oil drilling near Grande Prairie, Alta. (Rob Ganzeveld/Rob Ganzeveld)

Schizas’ Mailbag

Artek Exploration a case of buy high and sell higher Add to ...

Hi Lou,

Always enjoy reading your articles. Would you kindly giving me your views on Artek Exploration – and potential upside within the next year?

Thank you,

Tom

Hey Tom,

Thanks for the assignment.

I am glad to hear that you are getting value from the analysis undertaken on requests from investors like yourself. Artek Exploration Ltd is a junior oil and gas exploration and producing company that was started in 2005 as a private company and moved to the public markets by way of a reverse takeover in 2010. Production has grown to 4,000 barrels of oil equivalent per day with expectations that output will average 4,700 BOE/D by the the end of 2014. The capital expenditure budget for 2014 is estimated to be between $61-million and $66-million. On May 13, 2014, the company reported a bought deal worth $43-million with a strike price of $4.10 per common share and $5.04 per flow through share. The company will use the proceeds of the financing to fund its activities.

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A review of the charts will help identify the trend, support, and resistance that are germane to RTK.

The three-year chart illustrates a stock that has moved higher as it broke out of a tight range bound trading pattern. For most of 2013 the shares oscillated between support at $3.25 and resistance at $3.75. In March of 2014 RTK broke above resistance and ran to a 52-week high of $4.49. The MACD and the RSI signalled a buy in November of 2013 that was the beginning of a new advance. What is also observable is the support along the uptrend line and along the 50-day moving average.

The six-month chart portrays the nice steady move higher that started at the end of 2013. The series of higher highs and higher lows have generated wealth for those investors who caught the ride. What is also encouraging is the willingness of investors to buy on pullbacks and ride the trend. Given the features displayed on the charts it looks like a case of buy high sell higher.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to lou@happycapitalism.com.

 
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