Moosh's Blog

Fracture stimulation (or ‘fracking’) of wells…

…in the oil/gas industry has been a controversial issue of late but while it’s still allowed to proceed, I shall continue to sit on the fence and absorb all the different points of view.

Empyrean Energy (TIDM code: EME) has a minority stake in the Sugarloaf project in the Eagle Ford play in Texas and many of the wells in which they have an interest require fracture stimulation, so let’s hope nothing changes with regards to fracking in the immediate future!

EME recently enjoyed an uptrend which could have been monitored using the following:

1. Ultimate oscillator bullish divergence signal (lower price (SP) lows versus higher indicator lows) between 28 November 2011 and 19 December 2011.

2. The main trend was a simple SP swing from oversold to overbought on both daily and weekly slow stochastic oscillators from 19 December 2011 (at 4.625p) to 15 February 2012 (at 8.125p).

3. Hourly Coppock Curve signal presented in December 2011 prior to the bulk of the uptrend, and in my opinion, was triggered by the December 2011 RNS relating to the results.

4. RNS-induced SP peaks to 8.25p on 1-2 March 2012 produced bearish divergence signals (higher SP highs versus lower indicator highs compared to the SP/indicator peaks of 15 February 2012) with 6 different daily indicators:

a. Money flow

b. Slow stochastic oscillator

c. Ultimate oscillator

d. Relative strength index

e. MACD

f. De-trended price oscillator

The bearish divergence signal suggested a potential downward SP movement. This materialised and sent the SP to an oversold slow stochastic position of 6.5p on 16 March 2012.

5. The 100 week exponential moving average provided strong resistance in the 8p region to prevent further upward movement in SP.



The Writer's view are their own, not a representation of London South East's.