Good Morning!
Petron Energy II Inc. (PEII) is trading at levels so low that it doesn’t take much to spin the action and leave early bird traders singing with joy.
As the chart reveals, PEII could use some good news. But down here at a minuscule 4 shares to the PENNY, a little “cheer” can add up fast:
Remember, down here the sub-atomic math gets sexy. If PEII moves 1/10 or even 1/20 of a cent, the effective % move becomes huge!
And since this baby oil stock still remembers what it was like to trade at a lofty $0.01 to $0.07, I see almost endless 1/20-cent opportunities here.
For one thing, that MACD has stubbornly kept rising, even though PEII hasn’t budged from its recent range of maybe $0.002 to $0.004.
That’s a classic divergence that indicates fuel trickling into the PEII rocket, but as yet the market has yet to push the ignition and feel the blast.
What do they say about rockets? “The longer the base, the higher into space!” After a month of boredom, a PEII breakout should be intense!
Volume seems to have hit its stride with MILLIONS of these tiny shares in play, so a PEII blast can also translate into more than pennies.
The only question is what lights the fuse. I have to admit, PEII has been too quiet and probably deserved to have had a little wind knocked out of it.
A couple of old 10-Qs . . . quiet quiet quiet . . . hey wait! PEII officially turned on some oil wells in Texas about 6 weeks ago. (Read more)
That news was evidently enough to push PEII all the way to $0.075 per share, and now that I do the math it’s not hard to see why!
PEII is such a pipsqueak that its pipeline and wells in Oklahoma support a market cap of $282,000 even though they only bring in $33,000 a quarter.
Do the math, that’s maybe a valuation of 8x quarterly revenue, higher than what a giant like Exxon deserves -- because PEII is growing a lot faster.
Those Texas wells only produce 8-10 barrels per day right now but multiply by $93 per barrel and 90 days a quarter, PEII just tripled its revenue!
Does triple the cash flow merit triple the PEII price? Market math is funny, but either way the calculations seem to go the right direction!
Either way, all PEII takes to deliver on that promise is the next production update or even the 10-Q. The chart is primed! Who will light the fuse?
See you soon!
Papa Roach
