Camber Energy Stock Forecast: CEI drops 10% at Wednesday open

Update: Camber Energy's stock price is facing another day of increased profit taking as WTI has dropped 4.6% to $118. The small-cap oil and gas producer jumped incredibly earlier in the week but fell 3% on Tuesday and is down 10% at $1.11 half an hour into Wednesday's session. Tuesday's high of $1.98 is now the target to beat if the stock can reinvigorate its momentum. If CEI drops below $1, then it is back in a bearish trend. The Nasdaq is up more than 2% on Wednesday, which may have traders turning their sights to tech rather than oil.

High global oil and gas prices stemming from the Russian invasion of Ukraine and related sanctions sparked a resurgence in Camber Energy stock (CEI) on Monday. CEI stock jumped 64.1% in the session to $1.28 and then another 16.4% to $1.49 in the afterhours trade. The Texas oil and gas small-cap followed on the tail of WTI reaching the $120s and briefly the low $130s. WTI price retracted back to the low $120s due to Germany coming out against a ban on Russian oil on Monday, but the US may vote to enforce the ban domestically as early Tuesday this week, which is keeping prices elevated.

Camber Energy Stock News: A possible supply shock

With the US likely to vote on banning Russian oil imports this week, analysts are already estimating future prices if Europe follows suit. Despite Germany's reluctance, other European nations could indeed ban Russian oil. Bank of America estimates that banning Russian oil would mean a 5 million barrel daily shortfall that would translate to around $200 a barrel. Russia's Deputy Prime Minister Alexander Novak says that Russia would have other outlets, but that a ban might cause prices to reach $300 a barrel in the short term.

Novak said on Monday that Russia could respond to a European ban by shutting off gas exports to Europe, a decision that would greatly harm Germany.

"At the same time we understand that, with the unfounded accusations against Russia regarding Europe's energy crisis and banning Nord Stream 2, we have every right to retaliate and impose an embargo on the gas pumped via Nord Stream 1, which today is filled up 100%," said Novak. "We are not making this decision yet. No one is winning from it. Even though European politicians, with their claims and accusations, are pushing us towards it."

Antony Blinken, the US Secretary of State, said on Sunday, “We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course at the same time maintaining a steady global supply of oil."

On January 4, Camber received a notice from the NYSE that it had failed to hold an annual shareholder meeting for fiscal 2020, a requirement to remain listed. However, management says that at the present time its listing on NYSE is not in doubt since it is preparing to hold the necessary meeting.

On February 15, Camber subsidiary Viking Energy Group acquired a 51% stake in "entities that own the intellectual property rights to fully developed, patent pending, ready-for-market proprietary Electric Transmission and Distribution Open Conductor Detection Systems designed to detect a break in a transmission line, distribution line, or coupling failure, and to immediately terminate the power to the line before it reaches the ground."

Via its acquisition of Simson-Maxwell, a provider of power generation products, and Viking's investment in "renewable diesel" over the past two years, Camber has been diversifying away from oil and gas.

Due to the heavy shorting of Camber's shares, which is related to almost constant dilution, some Reddit traders have made it a focus of their search for short squeeze candidates over the past year.

CEI key statistics

Market Cap	$387.5 million
Price/Earnings	N/A
Price/Sales	41
Price/Book	8
Enterprise Value	$400 million
Operating Margin	N/A
Profit Margin	N/A
52-week high	$4.85
52-week low	$0.33
Short Interest	11%
Average Wall Street Rating and Price Target	No Coverage

Camber Energy Stock Forecast: Setting up for a two-bagger

First things first, CEI stock is incredibly risky. There is not much cash flow to speak of, and the company's continuing dance with delisting should not warm the heart. If you are a risk-taker though, the possibility of short-term gains has a fairly decent chance. Looking at the weekly chart going back to late 2019, there are at least six instances of price spikes.

For a penny stock, CEI does offer some real chart dynamics. The only thing that matters with a stock like this is price levels. First, notice how $0.50 has been a constant support level since 2019. Although CEI price has dropped below here at times, it has been significant for more than three years.

The next most important area is the $2.60-to-$3.10 supply zone. This area has often acted as a region where traders take profits and worked well from December 2019 to February 2021. From Monday's closing price of $1.28, $2.60 would make it a two-bagger. After $3.10 there are two range highs – $4.10 and $4.85. Each of these higher prices provides a target for risk takers to take profit. 

CEI weekly chart

Previous updates

Update: Camber Energy shares remain on a tear on Tuesday and are up over 30% at the time of writing to $1.66. Shares zoomed as high as $1.98 earlier in the session, a run that is comparable in percentage terms to Monday's 64% spike. WTI has jumped about $8 to $128 on news that the US is about to go through with a ban on Russian oil. This would do little in itself, since the US is not a large importer of Russian oil, but may signal other European nations to sign onto the ban, which would greatly reduce supply and would require the reorientation of the global crude trade.

Update: Camber Energy shares reversed early spike to five-month highs of $1.98 and dropped 3.12% to end Tuesday at $1.24. CEI stock price retreated in tandem with oil prices after fears over the Russia-Ukraine conflict ebbed on reports that Ukraine would no longer seek NATO membership, in a nod to Russia. US President Joe Biden’s announcement of a ban on the Russian oil and gas imports was well discounted by the market.