Africa 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.
There 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.