Bought to open ECR

action

Bought 4,000 shares of ECR at $2.786. Total cost including commission is $11,151.99, or $2.788/share.

price target

First target is $3.50, which is a high volume level, and the floor of the June gap-down.

stop loss

ATR(10) is 37¢. That would indicate a stop loss around $2.40. This is a volatile stock, though, and it could gap towards its 100SMA at $2.21, before anyone can sell. In that case, I would let the stock recover. I won’t stay in, if the stock closes below that level, though.

time frame/catalysts

I might scratch this position tomorrow, if the jobs report is truly shocking. Otherwise, I would like to see how gas prices perform over the next couple of weeks, especially against the backdrop of record heat in the Eastern U.S.

rationale

This company is a domestic oil & gas producer with acreage in the Marcellus and Utica shale. Natural gas has recovered recently from a multi-year low, put in earlier this year.

Natural Gas futures, weekly chart from FinVizNatural Gas futures, weekly chart from FinViz

Also, ECR has distinguished itself from other small E&P companies by raising equity, last month. While the dilution really hurt the stock price over the past 6 trading days, it removes an uncertainty overhang. Moody’s acknowleged this in their rating upgrade issued today.

July 7, 2016 at 2:39pm · ECR · buy to open · stocks


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