COMSTOCK RESOURCES...

originally published Friday, August 12, 2016

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All Oil & Gas Stocks

Comstock is looking like a bargain here. It has been in a brutal bearmarket which has seen it lose 99% of its value from its 2008 highs, but there are signs that not only has this savage bearmarket at last ended, but it is about to take a turn for the better and embark upon a new bullmarket, which from the current extremely low level should lead to good percentage gains.

On its 20-year chart we can see how Comstock peaked at a lofty $425 when oil itself topped out at over $150 a barrel back in the middle of 2008. As we can see there is definitely significant correlation with the oil price, with Comstock being hammered during the latest oil price slump during 2014 - 2015. This is important to note here, because oil looks like it is turning higher again now.


A 3-year chart enables us to examine the action from the start of the latest oil price slump to the present. On this chart we see that after a near vertical decline late in 2014, the price settled into a more gradual decline, shepherded lower by its falling 200-day moving average, before showing definite signs of basing at a very low level from March of this year. So it is interesting and very important to observe that in recent weeks upside volume has started to kick in, driving both volume indicators shown higher, and with the still falling 200-day moving average closing in on the price, the chances of an upside breakout above this average are increasing rapidly, especially given that oil appears to be reversing to the upside as mentioned above.


On the 6-month chart we can that there was a sharp rally over a week ago. The stock has been kept under observation and we had been hoping that it would backtrack again towards the lows, so that we could pick it up there, but now it is looking less likely that this is going to happen. Instead the chances are increasing that it will vault above its 200-day moving average soon. The stock is accordingly rated a buy here, and one way to handle the risk of its backtracking towards the support shown again over the short-term is to buy some here, and buy more either if it drops back towards the support, or if it looks more likely that it will take off higher without backtracking first. We will keep a close eye on it going forward.


Comstock Resources website

Comstock Resources Inc., CRK, closed at $4.11 on 11th August 16.


Posted at 9.00 am EDT on 12th August 16.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment or securities advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market technical analyst, Clive Maund is not a Registered Investment Advisor or Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.