Gediminas Jasionis
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Compton Petroleum Corporation (TSE:CMT) (PINK:CMZPF) Trades on Rumors?

by Gediminas Jasionis Jan 20, 2011
compton_chart.pngCompton Petroleum Corporation (TSE:CMT) (PINK:CMZPF) stock added over 11% yesterday on a rally that's now predicted to have been a one-day hype.

No news or official explanation from the company surfaced yet. However, the trading volume of over 24 million that is 12 times the 50-day average attracts a lot of attention. If morning panic doesn't drive the share price down, there could be a continuation driven by newly introduced traders.

CMT stock has bounced the 39 cents level a couple of times in the comparatively recent past. Still, the sudden price burst looks abnormal because of the trading volume. Although no proof can be found on public channels, this can be the work of rumor spreading.

The only recent event that could have caused the share price spurt was the supposed completion of drilling that began on December 15, 2010. Apparently, the company was planning to finish drilling a 2,980 meters hole on the Vulcan project by January 15, 2011. However, Compton didn't provide any official update related to the matter.

compton_logo.jpgCompton management's decision to go on without properly addressing investor relations issue is the main reason why the stock is beginning to attract waves of speculative trades. The company doesn't update its website and generally works behind a curtain, except for the mandatory quarterly reports.

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