Gediminas Jasionis

The moving penny stocks - Empire Energy Corporation International (OTCBB: EEGC)

by Gediminas Jasionis October 5, 2009

energy_logo.jpgA big green candle during Friday's trading came as a response to Empire Energy Corporation International (OTCBB: EEGC) renewed application on their key exploration license. The intraday rally, however, failed to break the most recent resistance, leaving investors speculating on the possible outcome for this week.

The move has actually confirmed resistance at $0.0425. Without further news the price is likely to only consolidate above $0.03, as previous resistance has now become the support. It is currently hard to say whether the price is more eager to just consolidate, or will it continue with correction placing its support a bit lower at $0.0225.

The news wasn't something that would mean an instantaneous situation improvement, so the latter scenario is more likely to happen. Without the renewed license Empire Energy might've ended up heading for imminent failure of their business.

Without cash the company cannot do much with their license anyways. So I guess we will be waiting for some type funding until the stock price could even be considered as able to move back up towards the year ago level. And equity or debt funding isn't likely to do anything here so we're waiting for management to at least secure some loan facility, which actually is hardly doable considering how leveraged the company is.

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