EXCO Resources Inc. (NYSE:XCO) Tumbled on the US Gas Inventories Increase
[[tagnumber 0]] [[tagnumber 1]] [[tagnumber 2]]EXCO Resources Inc. (NYSE:XCO) tumbled on Wednesday as there were signals that the demand for oil and gas could slow further down. The higher volatility and the exploding trading volume for XCO in the last trading session could bring the stock price even lower today.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 5]][[tagnumber 1]] [[tagnumber 2]]Yesterday, XCO closed at $1.57 for a share which represents an over 10% loss in just one session. The stock is now very close to breaking the lower Bollinger band which could then lead to a new six month bottom. The trading volume exploded on Wednesday as well, reaching the highest level since April.[[tagnumber 1]] [[tagnumber 2]]EIA Petroleum Status report for this week showed a decline in crude oil inventories, however, gasoline stocks are building further up. Combined with the other recent data that showed slowing in the manufacturing sector, such news was expected have extremely negative impact on small companies like XCO.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]The company‘s financial and operational results have not been optimistic in the first quarter of this year, thus both technically and fundamentally the stock looks very bearish and could be a good shorting opportunity this week.[[tagnumber 14]][[tagnumber 1]] [[tagnumber 2]]XCO filed its quarterly report at the end of April. The company‘s revenues from oil and gas shrunk massively, being less than half of what they used to be in the same period of last year. Thus XCO reported for the first time an operating loss and a few times lower operating cashflow.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]Cash reserves should then go even lower this quarter, while the working capital gap is likely to grow further. As XCO already has a huge long–term debt, financing will definitely not come at the most favorable terms which would additionally bring the stock price down.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]
