If it seems like you've heard the market buzzing about FX Energy, Inc. (NASDAQ:FXEN) quite a bit of late, you're not crazy - it's been in the spotlight a little more than usual over the past few weeks. And for good reason. FXEN shares are about to explode higher. All they need is the right nudge. More on that in a second.
For those not familiar with the company (and statistically speaking, there are plenty of people in that category), FX Energy is an independent oil and gas explorer. The $190 million company has generated $37.5 million in revenue over the past twelve months, and lost $22 million in the process of generating those crude-oil sales.
It's not impressive. Then again, the trailing numbers were never the point. The FXEN 'story' is the potential of the three wells the company is working on in Poland, which to put it mildly, have been underestimated and not even started to be factored into the stock's value until very recently. There's a lot more ground to cover before shares hit their appropriate value.
The details of the Polish opportunity are too numerous and too complex to hash out here. Interested investors can explore that information at the company's project-detail page by going here, if the phrase "there's a lot of gas down there" won't suffice. The details are also not necessary for our purposes.
See, FXEN is a scenario in which we have to trust that the story the chart is telling us is an accurate and fair reflection of the progress the underlying company is making (and just for the record, the market's usually - even if unconsciously - right). So what's the chart of FX Energy Inc. telling us at this point? Like the company's stream of press releases suggests, the explorer is in a transition, from a situation that's got more risk than reward to a situation that's got more reward than risk.
And that transition is about to put the pedal to the metal.
Since April - and for the first time in a long time - FXEN has made a string of higher lows (red). Were it just higher lows over the span of a few months, it might be dismissible. But, these higher lows came during a time when the stock put decided and repeated pressure on the 200-day moving average line (green) as a ceiling. Were it just one or two brushes of the key long-term moving average line, it might too be dismissible. But, the bulls continue to test the water, and they've kept their toes dipped in the pool over the past couple of weeks.
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Conclusion? The market's ready to be bullish here. Traders are looking for a reason and way to be bullish. Nobody wants to be the first to take the next - and big - step above a key technical ceiling. None of the would-be buyers are backing down, however. It's going to happen.
What's interesting, in a bullish way, is how this new bullishness has coincided with clear and tangible progress from FX Energy, Inc. over the past few weeks. If you believe there's any oil and gas in Poland at all - and history says there is - then this is more a matter of "if" than "when". Time to take a swing.
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