Digging for oil: AMEP.OB

Yesterday people definitely woke up for the oil issue. Anything in the oil sector, specially small and micro cap stocks, shot up with explosive volume. With the oil price where it stands now many non-profit companies will be lucrative. I've seen this kind of action in gold junior companies about a year from now, with the same genuine motivation. These micro cap stocks in the oil sector present extreme leverage for investors and their leveraged bet is starting to be proved right.

But we have a liquidity problem with AMEP.OB. Yesterday the stock traded 37 million shares (the biggest volume in the company history), but that's still not enough. So I'm buying just 3.33% instead of the usual 6.66%. I urge caution and if you will make just a small bet (very small).

Let me show you the charts, starting with one with a little history:



As we can see the stock was at $0.13 about a year ago, which doesn't mean much. Now the chart looks like this:



Yesterday we've had a powerful white marubozu which closed above the $0.017 resistance level. If the stock manages to cross the $0.028 barrier we get a double bottom pattern with a target in the $0.046 area. But those are all suppositions.

Again I urge caution and I'll be a buyer only if we don't get an enormous gap up at the open.

Everyday I will analyze AMEP.OB after the market close until I sell the stock. I always tell I'm going to sell before I actually take action. You just have to follow the answers to this post.

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