Gediminas Jasionis
2 Vote 0

Africa Oil Corp. (CVE:AOI) (PINK:AOIFF) Hits New Multiyear High

by Gediminas Jasionis May 2, 2012
3aoi_chart.pngAfrica Oil Corp. (CVE:AOI) (PINK:AOIFF) stock price hit a new high and bulls rushed to make use of the technical breakout.

AOI share price was up 13.5% nearing end of the session. The accompanying trading volume topped 2.5 million, which was roughly twice the average turnover of 1.3 million.

With today's move AOI broke out to a new multiyear high and this might attract significant attention on technical terms alone. The price has support at $5.70 per share in case of retracement.

The entire bullish price rally that was recorded since the end of March was based on Africa Oil's potential and findings on their properties in Kenya, Ethiopia and Somalia. Stock value has already increased 2.5 times since then and keeps going despite the lack of a real fundamental backbone.

8africa_oil_logo.jpgThere was no news to support today's price action either. The whole rally is purely technical and could lead to a harsh increase in volatility if traders were to start questioning the extent to which AOI can be over valuated at the moment.

The company holds a significant amount of cash and comparatively very little debt. However, their market cap is more than five times larger than the book value, and this is important to take note of since African Oil currently doesn't have sustainable income.

Comments (4)

1. Guest
May 07, 2012, 05:09PM

Quotes technical crap..............just discovered 1 billion b/oil..........up 40pc more today.............go back to school.

2. Guest
May 04, 2012, 02:33PM

Quotes This increase isnt technical, there maybe no news on your side of the gamma quadrant, but over here its evident that Nigeria has just lifted subsidies on Oil a source of much corruption in Nigeria and better still great news for AOI's long term prospects for supplying oil to the country.

3. Guest
May 03, 2012, 02:46AM

Quotes Not technical whatsoever........if you work in the oil industry in east africa!

Word going around that Tullow and AOI have found a very substantial find on its first Kenya drill, which will imediatley desrisk all the surrounding block owned by the aforementioned pair.

4. Guest
May 02, 2012, 04:38PM

Quotes Not technical. Read the BBC news on oil subsidies in nigeria.

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