Far East Energy Corporation (OTC: FEEC) started the week right where it left off during the previous one. Buyers bolted from the starting gate as the stock gapped higher today (the intraday low is greater than the high made on Friday). Far East Energy shares opened at $0.26, or two pennies higher than Friday’s closing price and barely looked back. The stock closed Monday up more than three cents at $0.271. The gain of 12.9% rode a wave of volume amounting to over 3.3 million shares, which is six times the average daily volume for the last three months. Today’s action is the ninth consecutive day that the stock has marched higher since it hit $0.15 on June 26, 2012.
The number of shares trading hands in the first half-hour of the session totaled over 1.3 million shares. The stock hit its low for the day at $0.252 in the first hour of the trading day. As trader’s stomachs growled right before lunchtime on the east coast, Far East Energy shares reached the peak price of the day when they traded for $0.297. The stock slowly retreated into the closing bell as volume dwindled considerably from the opening explosion.
After setting a 52-week low at a hair below $0.12 in December, share prices pitched 23 cents higher until the first week of February when the stocked kissed an annual high of $0.35. Since February, buyers have shown little affection as the stock price has declined steadily until nine days ago like a slide at a daycare center. The stock has risen 50% since last Thursday.
The Texas-based energy company is focused on exploring, developing, and producing coal bed methane gas properties in the People’s Republic of China. Through its subsidiaries, it holds three production-sharing contracts in Yunnan Province.
Several hours before the opening of the US stock markets, Far East Energy announced it received certification of Chinese reserves and additional borrowing capacity under the Standard Chartered Bank Credit Facility. The early morning excitement displayed by buyers may be linked to the announcement.
A scan of newsletters and stock promoters show little activity since the spring. On Twitter, Investorshub made comments about today’s gap and how the stock looked extended. Additionally, @Pennystocks 24 was promoting the stock right before noon.
After a run in which the stock has doubled in nine days, traders might be wondering if any gas is left in the tank for tomorrow. Some things they will be considering is whether the gap today signals one last gasp by buyers who sat on the sidelines during the recent up, or if there is more to come. Another question to ponder is whether the recent rally was the start of something new, or just a bounce.