A correction is to be expected after a stock goes through a strong rally and that it what happened with the CGX Energy (OTCMKTS:CGXEF) stock on Monday. Following a strong rally in the stock, it slumped by 14% yesterday amidst a selloff.
While the decline was substantial, it should be kept in mind that the CGX stock is still up by as much as 155% over the course of the past month. More importantly, it is necessary for investors to note that there have been no recent developments that might have ld to this strong rally in the sock over the past month.
The last major news with regards to CGX Energy emerged back in April this year when the company announced that CGX Resource Inc entered into an agreement with Maersk Drilling Holdings Singapore Pte Ltd. The agreement is with regards to a semi submersible drilling unit named the Maersk Discoverer.
In addition to that, the agreement is also going to be involved in the Kawa 1 well which is a joint venture. While this was a big breakthrough for the company, it is unlikely that the recent gains in the stock are liked to it. Investors could do well to keep an eye on the latest news regarding CGX.
Market Reaction:
On Monday, CGXEF stock moved down 13.70% to $1.89 with more than 2.38 million shares, compared to its average volume of 135K shares. The stock has moved within a range of $1.6100 – 2.1900 after opening the trade at $2.19 Over the past 52-week, the stock has been trading within a range of $0.2500 – 2.2000.
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