Nikolay Tomov
2 Vote 0

Will Connacher Oil and Gas Limited (TSE:CLL), (PINK:CLLZF) Stop Its Fall?

by Nikolay Tomov Oct 5, 2011
Connacher_Oil_-_Chart_-_5_Oct_2011.pngThis year, a huge number of energy firms, including Canadian oil and gas companies, suffer losses on the markets. It seems they reach the bottom these days when many energy stocks are falling to 52-week lows, some of them even setting their all-time lows.

The shares of Connacher Oil and Gas Limited (TSE:CLL), (PINK:CLLZF) follow no different pattern, unfortunately. The continuous downfall of the stock has accelerated further more since mid-August. As a result, this week it sank to never seen before depths:
  • On the American Market, the stock marked a 5-year low of $0.2284 on Monday;
  • The same day, on the Canadian Market, CLL slipped to an all-time low of $0.235.
Yesterday's session on the Toronto Stock Exchange (TSE) gave some signs for a positive change, though. Connacher's shares climbed more than 19%, with the rise confirmed by the big volume of almost 7M.

The last two candlesticks formed something similar to the Bullish Harami Pattern. The white body during the last session is probably a sign that the sellers' power is decreasing. The Harami has however a low reliability - without a strong confirmation we cannot claim that the current negative downtrend has really reversed. Quite often, the market enters into a congestion phase after such a pattern.

Connacher_Oil_-_Logo.pngThe decline of the company's shares is perhaps related to the sinking price of crude oil, which has been going down over the last two months. The same holds true for the price of natural gas.

At least, the company is financially stable, with a cash balance exceeding $75M, as stated in the latest press release dated Sep. 30. However, Connacher is accumulating funds mostly by selling its assets, and as we can read in the mentioned announcement, this trend is going to continue in the future.

Comments (3)

1. nicksan74
October 07, 2011, 06:32AM

Quotes Would you please allow me to share some points of view here?
A. Company's financials reveal that as of June 30, 2011 current assets exceed current liabilities. This means positive working capital. Connacher has no immediate financial problems or deficiencies. It is some sort of financial stability.
B. The annual MD&Analysis for 2010 show that the huge long-term debt consists primarily of First and Second Lien Notes. The principal is due in July 2014 and in December 2015, respectively. It is highly probable that Connacher do its best to Secure Enough funds till 2014 or 2015, in order to repay the huge debt!
C. There are many companies having large debts. It is even normal for a company, to a certain extent, to accumulate debts in the process of developing its business;
D. The declining price of crude oil and gas is and remains a really important factor that cannot be neglected.
E. I can see nothing wrong about using a technical analysis when writing about stocks.

2. Guest
October 05, 2011, 08:45PM

Quotes Good Points, thank you for sharing.
Well, what can go wrong with Canadian oil sand ?!
I'm totally ready for some serious money and fatty return so I can get some my Christmas Luxury !

3. Guest
October 05, 2011, 08:36PM

Quotes That's a good question, but it's been two days that the price had rebound more then 40% in total, it's amazing how fast this company's share price picked up and I believe it's a great point to buy some in. At the end of the year 2011 the share price should be back to a dollar =)

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