OOIL Positions for another Big Week
Over the last two weeks, I’ve been covering the developments of what could be one of the biggest developments in the fracking industry. OriginOil (OOIL) has been on a hot streak since the second week of this month not only garnering the attention of momentum traders but also of an entire industry. Earlier this month, OOIL made several announcements regarding the successful demonstration of its CLEAN FRAC technology, which not only supports enhanced filtration but also allows users to attain purity levels to meet exact project specifications.
This past week, OOIL hit highs of $0.225; a price it hasn’t seen since March! More importantly in my opinion was how the stock reacted following the pull-back. Don’t get me wrong, there were many days where intra-day bounces were key in grabbing potential profit but in looking at this from a “Long” perspective, we’ve got to take the entire week into account.
As you’ll notice in the chart above, not only has OOIL broken through the previous week’s resistance but following the pull-back from Monday’s high, OOIL has begun to establish a new support level in the $0.18-$0.19 range. To me this suggests incredible potential for a breakout.
We saw it earlier this month where OOIL established a 4 day support at much lower levels (0.13) and from there, took off on the rally that we have witnessed over the last 10 days. Now that its back at even higher levels, I feel that the momentum coupled with the company’s recent developments could be a “perfect storm” to see another move.
In addition to this, attention has begun to build and several financial media sources message boards, and chat rooms are buzzing about OOIL. In fact, BarChart still gives OriginOil a green “Buy Rating” despite the recent pull-back so looking at the technicals alone may have piqued the interest of the investment public.
On top of this, attention has also been garnered by major media outlets as well. CEO Riggs Eckelberry was recently featured on an episode of The Big Biz Show where he expressed how OOIL has begun to really expand its technology in order to set itself apart from the competition. Mr. Eckelberry states that OOIL’s technology is “perfect for this fracking boom.” He continues to explain that OriginOil’s extraction process not only recycles the water but it doesn’t leave “gray water”; OOIL’s technology leaves behind clean, reusable water for continued consumption throughout the fracking process.
In the company’s most recent shareholder newsletter, management cites that the latest developments from Iraq not coming online as second largest reserve holder in the world where the battle that’s going on over the second largest refinery has posed an incredible problem. This has caused a massive spike in the price of WTI crude. As a result the industry is now looking at a fracking overload – Mega Fracking.
OOIL’s filtration process results in such a clean method that the company makes membranes work “for the first time in the oil industry”; the company proved this in its Delta, CO demonstration. Mr. Eckelberry states that the company has a two-part solution to capitalize on this boom, which includes a licensing option in addition to its more immediate, CLEAN FRAC product line allowing more flexibility for clients to achieve a specific quality needed for certain purity levels. The result is the operators now spend less on water simply because its recycled versus being wasted.
Keeping this latest “Mega Frack” situation in mind, it’s never been more important for fracking companies to be aware of environmental effects from operations. In 2012 alonefracking wells nationwide produced an estimated 280 billion gallons of wastewater. Discharge of fracking wastewater into rivers can pollute drinking water supplies. For example, after water treatment plants discharged fracking wastewater into the Monongahela River, local authorities issued a drinking water advisory to 350,000 people in the area. More importantly for areas of water scarcity, unlike most industrial uses of water which return water to the water cycle for further use, current conditions find fracking convert clean water into toxic wastewater, much of which must then be permanently disposed of, taking billions of gallons out of the water supply annually. OOIL has a technology to completely change the face of the industry by combating the toxic byproduct of hydraulic fracturing.
Keeping all of this in mind including the company’s most recent developments in addition to the technical set-up, OOIL could be a force to be reckoned with heading into Monday morning. Friday saw lows in the support range but a late afternoon rally sparked a rebound that I think could carry well into the week ahead. If you haven’t already, start your DD on OriginOil, read through the recent press, check out the Big Biz Show interview and let’s get ready to kick the week off strong!
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