We had some decent gains yesterday, and if you are looking for a high reward, lotto style play today, check out Petron Energy II, Inc (PEII) for a short term trade.

 

Priced at only $0.0002 - $0.0003, PEII is much lower priced than we are used to (and admittedly, is not for everyone), but here is why it could be good for a high reward/risk trade.

 

#1 - Assuming the data OTCMarkets.com is correct, PEII has a market cap of less than $400k. A market cap this small is very rarely seen.

 

#2 - PEII has a history of making strong short term gains amidst the longer term sell off - just look at the chart below. Just a few weeks ago, it ran 150% in a few days. And at the end of March, it ran for over 100% in 2 days.

 

#3 - PEII is already very liquid, which means traders have easy access and the ability to enter and exit trades relatively easily.

 

#4 - Technically, PEII appears very oversold and looks to have entered the capitulation phase. Often times we see a bounce once a stock has been through this phase and sold off this aggressively.

 

Here is my basic chart analysis...

 

PEII has been hit in a big way recently, sinking to near all time lows, well below its 50 day moving average of $0.0009, and 200 day moving average of $0.0046.

 

It's RSI is at 30, again, a level that indicates it is very oversold. And its MACD is turning up, a bullish sign.

 

PEII could start to bounce higher from these lows today.

 

 

For those who want to know more about the Company, here is some information about Petron Energy II, Inc (PEII) compiled from publicly available sources...

 

Petron Energy II, is engaged primarily in the acquisition, development, production, exploration for and the sale of oil, gas and gas liquids in the United States. As of December 31, 2012 the Company is operating in the states of Texas and Oklahoma. The Company sells its oil and gas products primarily to a domestic pipeline and to another oil company.

 

PEII Subsidiaries

Petron Energy II Pipeline, Inc. is engaged primarily in the transmission of gas and gas liquids for its own wells and third party wells in the United States. As of December 31, 2012 the Company is operating in the state of Oklahoma. In addition, the Company owns two gas gathering systems located in Tulsa, Wagoner, Rogers and Mayes counties of Oklahoma, one of which is fully operational. The pipeline consists of approximately 132 miles of steel and poly pipe, a gas processing plant and other ancillary equipment.

 

Petron Energy II Well Service, Inc. is engaged primarily in Well Service operation for its own wells currently and expects to begin well service operations for third party operators in the future.  As of December 31, 2012 the Company is operating in the states of Oklahoma and Texas.  The Company owns all of its equipment used in the Petron Energy II Well Service, Inc.

 

Texas Properties

The company recently agreed to acquire approximately 2800 acres in Munday (Knox County) Texas, this property is comprised of 48 wells. The property has 34 of 48 existing wells capable of producing commercial quantities of oil. They  are reviewing the property for further producing zones which may be available.

 

Oklahoma Properties

Petron purchased a 75% stake in approximately 1100 acres with 59 wells in Wagoner and Tulsa Counties, Oklahoma. They have 56 existing wells and 3 newly drilled wells. This acreage has 5 to 7 payzones, which are capable of producing oil, gas and or both commodities.

 

The company has purchased 75% equity stake in a 105 mile pipeline gas system, Petron Energy II Pipeline, Inc. The pipeline system extends from Wagoner County into Tulsa County Oklahoma. This system is critical to their development in the area because it provides them access to deliver their gas to market at minimal cost. They believe their ownership of the gas pipeline system will provide them opportunities to grow their acreage as they are the only transporter of natural gas in the area.

 

PEII has also purchased a 75% stake in a second gas pipeline system, Petron Energy II TNT, Inc. This pipeline system extends 30 miles through Wagoner, Mayes, Rogers and Tulsa Counties Oklahoma. There were over 450+ wells drilled and tested in anticipation of the completion of this gas system. This system provides access to a natural gas market for them along with development opportunities for the company. Petron Energy II TNT pipeline is the only gathering system to transport natural gas the area.

 

To learn more about PEII, visit their website at http://petronenergyii.com/

 

 

I am hoping for big things from PEII today. So if you like what you see, make sure you do your own research now and be ready to trade at the opening bell.

 

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