Litmus test for Bonanza Creek Energy Inc. (NYSE:BCEI)

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Shares of Bonanza Creek Energy Inc. (NYSE:BCEI) last traded at $0.50. The company’s performance year to date is -50.49%. The 200 day simple moving average is -60.76%. The 200 simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall long-term trend. The price level in a market that coincides with the 200 SMA is recognized as a major support when price is above the 200 SMA or resistance when price is below the 200 SMA level.

As per recent filings, Bonanza Creek Energy Inc. (NYSE:BCEI) has an insider ownership of 0.20%.

Bonanza Creek Energy, Inc. is engaged in the acquisition, exploration and development of onshore oil and natural gas properties in the United States. The Company’s core operating areas are the DJ Basin in Colorado and the Cotton Valley formation in southern Arkansas. Bonanza Creek Energy, Inc. is based in Denver, Colorado.

Bonanza Creek Energy Inc. (NYSE:BCEI) has been storming Wallstreet with solid press release. Recently, the company announced that according to the March 2017 study commissioned by RetailMeNot and conducted by Forrester Consulting, the company’s mobile marketing solutions generate a three-year, risk-adjusted return on investment (ROI) of 4.3x.

The Barchart Technical Opinion rating is a 100% Sell with a Strongest short term outlook on maintaining the current direction. Longer term, the trend strength is Maximum. Long term indicators fully support a continuation of the trend. The market is in highly oversold territory. Beware of a trend reversal.

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50). The current RSI is 23.31 suggesting a bearish price action.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oil prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). The 5 day EMA 0.74 is higher than the last trade price suggesting a short term bearish pattern building up. Long term, the 50 day EMA 1.16 is also higher than the current trading price depicting a bearish trend overall..

Bonanza Creek Energy Inc. (NYSE:BCEI) is all set to announce its earnings on Mar 20/a. As per Zack’s analyst ratings, Bonanza Creek Energy Inc. (NYSE:BCEI) currently has an average brokerage rating of 3.75. On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NYSE:BCEI) is $1.333 with a high of $3 and a low of $1.

As such, while we believe Bonanza Creek Energy Inc. (NYSE:BCEI) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.

Bonanza Creek Energy  today announced that in accordance with and pursuant to its Plan of Reorganization (the “Plan”), which was confirmed by the United States Bankruptcy Court for the District of Delaware on April 7, 2017, the Company has successfully completed its prepackaged restructuring and emerged from Chapter 11.

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