With no significant good news out of the company for a long time investors are becoming bored and frustrated with Torchlight Energy, and that includes us, and as a result downside risk is now growing.
We can see this technically on the 6-month chart with the price beneath the 50-day moving average which is now rolling over, and the pattern that has formed following the early July spike looking more and more like a potential Head-and-Shoulders top. If the price should break below the key support shown it is likely to plunge. Whilst we cannot rule out that it won’t perform as originally expected, the chances of it doing so are now dimming. We at about even on this since we bought it twice at low points in the pattern.
There are two ways to handle this. We can stay long in case it does go on to do what we originally expected, in which case a stop should be set just below the key support at $1.05. The alternative is to simply ditch it and switch the funds into one of our better gold and silver stocks which look set to take off higher soon.
End of update.
Torchlight Energy website
Torchlight Energy Resources, TRCH on NASDAQ CM, closed at $1.10 on 28th August 16.
Posted at 7.00 am EDT on 29th September 16.