Reversal Pattern Spotted on Ultra Petroleum Corp. (OTCMKTS:UPLMQ) Shares

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Ultra Petroleum Corp. (OTCMKTS:UPLMQ) shares were up 21.60% on Wednesday to $1.52, leading to the creation of a double bottom reversal pattern on its daily chart. Price failed in its last two attempts to break below $0.25 and might be in for a test of the neckline at $1.50.

Ultra Petroleum shares have been trading in a 52-week range of $0.16 to $14.83 so there’s significant upside if the rally carries on. The company has a market cap of $209.52 million at 153.39 million shares outstanding.

Ultra Petroleum is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. It owns oil and natural gas leases in Wyoming, Utah and Pennsylvania and it also owns oil and natural gas leases, as well as fee oil and gas rights, in Colorado.

With that, the company’s operations and profitability are largely dependent on commodity prices, particularly energy resources. Fortunately for Ultra Petroleum, crude oil has been on a tear these days, with WTI crude oil trading around $50.50/barrel and Brent crude oil rising past $52/barrel. This could have a strong positive impact on the company’s revenues for the current quarter.

Keep in mind, however, that the company had a bankruptcy filing last year, citing the adverse impact of low crude oil and natural gas prices on their operations. Ultra Petroleum disclosed that their financial situation has been distressed, affecting their ability to comply with existing debt arrangements.

It’s still worth noting that this was unable to stop investors from keeping the company’s stock afloat, and this bounce could gain further traction as commodity prices continue to pick up or start being evident in the company’s quarterly earnings. As of its latest quarterly filing, total debt was at $3.2 billion and liabilities of $1 to $10 billion. The company also listed assets in the range of $1 billion to $10 billion.

 

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.