Camber Energy Inc (AMEX: CEI) gapped up 13.34% off Friday’s closing price and was surging up an additional 8% intraday.
The Russia-Ukraine crisis has boosted the energy sector as investors continue to weigh the effect the conflict will have on global oil supplies. On Monday, tribal leaders in the North African country of Libya forced a shutdown at the Sharara oil field, in protest against the state-run government. The conflict will shutter the production of about 450,000 barrels of oil per day, furthering concerns of supply shortages.
Camber Energy’s move higher was an exaggerated response to rising crude oil prices amid the global conflicts because the stock is a retail darling, partly due to its high number of shares held short.
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The Camber Energy Chart: Camber Energy is trading in a confirmed uptrend on the four-hour chart, but has not yet validated a daily uptrend because the stock has not printed a higher low on the larger timeframe. On the four-hour chart, Camber Energy’s most recent higher low was printed at 9:30 a.m. on April 14 and the most recent confirmed higher high was printed at the 86-cent level at 3:30 p.m. the day prior.
Eventually, Camber Energy will need to fall down to print a higher low on the daily chart, which may also cause the stock to fill the lower gap left between 91 cents and the 95-cent mark on Monday. Bullish traders and investors who are not already in a position can watch for a reversal candlestick, such as a doji or hammer candlestick, to form at the bottom of the gap for a possible entry.
If the stock trades sideways or slightly lower over the coming days, Camber Energy may print a bull flag pattern. If it does, the measured move is about 50%, which indicates Camber Energy could trade up toward the $1.50 level if the pattern is recognized.
If Camber Energy closes the trading day near its high-of-day price, it will print a bullish kicker candlestick, which could indicate higher prices will come again on Tuesday. If higher prices don’t come, the second most likely scenario is that Camber Energy will print an inside bar pattern to consolidate Monday’s soaring prices, which would lean bullish.
Sideways trading or a higher low is likely to come in the near future because Camber Energy’s relative strength index (RSI) is measuring in at about 70%. When a stock’s RSI reaches or exceeds that level, it becomes overbought, which can be a sell signal for technical traders.
Camber Energy is trading on higher-than-average volume, which indicates there is currently a higher level of interest in the stock. At press time, about 109 million shares of the stock had exchanged hands, compared to the 10-day average of 27.1 million.
On Monday, Camber Energy gapped up above the 200-day simple moving average, which indicates the stock is trading in a bull market. Traders and investors will want to see the stock close the trading day above the level for confidence going forward.
Camber Energy has resistance above at $1.19 and $1.36 and support below at $1 and 85 cents.
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