After surging higher in March shares of Jericho Oil (TSX-V:JCO, OTC:JROOF) have come under heavy selling pressure, erasing its gains for the year. From my vantage point the selling doesn’t make much sense because JCO continues to advance its STACK farm-in play. This farm-in, which was announced in January, increases JCO’s STACK acreage footprint to ~13,000 total net STACK acres; the first of two required wells in the farm-in has been fracked and is currently being stimulated:
Moreover, Jericho is poised to deliver strong year-over-year production growth through its 2018 drilling program. Another thing that I love about the Jericho story is the strong insider ownership (46% of shares outstanding are held by insiders) and big money financial backers (Breen Family Trust, Gibralt Capital, Mike Graves).
I believe the recent selling has been led by a couple of parties who may have sold out of impatience, just as Jericho Oil is in the midst of its most transformative year in its brief history.
From a technical perspective I can’t say that the price action since the March peak is what we’d like to see, however, the long term trend is still clearly to the upside. While the stock has just dipped under its 200-day moving average, JCO is now testing a critical area of long term support/resistance:
JCO (January 2016 – May 2018)
Jericho is now also officially the most oversold it has been in the last three years (daily RSI/CCI at new lows). It is also important to remember that the slope of a moving average is more important than whatever level a moving average may be at on a given day. I believe that the recent weakness may be a gift just before Jericho delivers a steady flow of drilling news from its highly prospective Oklahoma STACK plays.
Disclosure: Author of this article is long JCO shares at time of publishing and may buy or sell at any time without notice.
Disclaimer
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Jericho Oil Corp. is a high-risk venture stock and not suitable for most investors. Consult Jericho Oil Corp’s SEDAR profile for important risk disclosures.
EnergyandGold has been compensated to cover Jericho Oil Corp. and so some information may be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.