Dueling Theses Stymie Camber Energy Stock Ahead of Unusually Cold Winter

Based purely on recent headlines, the enthusiastic narrative over Camber Energy (NYSEAMERICAN:CEI) makes plenty of sense. As an organization with interests in active oil and gas properties, CEI stock is now among the most relevant investments available thanks to soaring energy prices — and no end in sight.

CEI stock: Image of an oil wells with an orange-red sky at dusk
Source: Shutterstock

First, oil prices have been sharply on the rise since the March and April doldrums of last year but particularly since late 2020. That period coincided with encouraging progress on the novel coronavirus vaccine front, which later became a full-blown rollout.

At the same time, vehicle miles traveled ramped up substantially from their lows and continuing to make progress. While the total amount traveled remains off by about 4% from pre-pandemic highs, the point is that markets are forward looking. Therefore, it’s logical that oil and gas plays moved higher and CEI stock, despite many red flags, tagged along for the ride.

Second, demand for natural gas has also moved higher, thanks to a combination of increased activity, higher personal savings due to last year’s lockdowns and particularly the colder weather season fast approaching. Indeed, anything related to natural gas and heating fuels have soared, which helps explain some of the bullishness in CEI stock.

What could really send shares over the edge, though, is an unusually cold winter. And that could very well be on tap. According to the 2022 Old Farmer’s Almanac, readers are warned to prepare for a “season of shivers.” Adding to the ominous tone, it states that this “winter will be punctuated by positively bone-chilling, below-average temperatures across most of the United States.”

If that’s the case, demand for heating fuels could skyrocket, which is exactly what speculators in CEI stock are hoping for. But will that be enough?

CEI Stock Caught in Bull-Bear Crossfire

Under normal circumstances, most analysts would arguably tell their clients to avoid CEI stock like the plague. Fundamentally, the underlying company shows too many problems for most investors to handle with ease.

However, nature could have the final say. Per Janice Stillman, editor of The Old Farmer’s Almanac, “this coming winter could well be one of the longest and coldest that we’ve seen in years.” That’s a tough take to absorb, considering that the Almanac commands an 80% weather-forecast accuracy rating.

Of course, such a circumstance bodes well for CEI stock. But it’s not just the weather that has bulls excited about Camber Energy. Many on social media — since it appears to be a meme-ish trade — are claiming that CEI is in the middle of forming an ascending triangle formation, which has positive implications.

Basically, if a horizontal line of resistance forms at $2.50, while CEI continues to print a series of rising lows, it’s possible that at the culminating apex point, the equity unit could breakout. Still, that’s a might big risk to take in light of awful fundamentals.

As InvestorPlace contributor Stavros Georgiadis stated, myriad red flags cloud the narrative for CEI stock. Before you make your decision on Camber, you ought to consider his arguments. But one of the most conspicuous concerns that something’s not right is its delinquent reports.

As a publicly traded company, the public has a right to know where their money is going and how it’s being used. Not having basic information is obviously distressing.

But another point that impacts speculators is the dilution of CEI stock. Equity dilution is a killer — just look at the special purpose acquisition companies that merged with their targets, only to flounder following the business combination.

Interesting Only for the Gambler

Pre-pandemic, I’d probably have been much more forceful in my opinion against CEI stock. Sure, some of its technical rumblings may suggest a short-term upside opportunity. However, it’s difficult to sustain a fundamentally flawed organization.

However, in the new normal, we’ve all learned to respect the power of social media. Thus, I’m avoiding any outright opinion regarding Camber Energy, other than to say it’s best left for gamblers.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2021/10/cei-stock-technical-vs-fundamental-analysis/.

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