Gray Fox Petroleum, Corp. (OTCBB:GFOX) Gains Momentum After Stock Junction Email

Energy stocks are on the rise in recent days, and Gray Fox Petroleum, Corp. (OTCBB:GFOX) is receiving great boosts, overcoming the recent correction. GFOX added more than 11% on Thursday to reach $1.82 on buying volumes of $1.39 million, heading for the end of the trading week with decent momentum. The only worry is that last Monday came with some profit-taking, and now there are enough shares bought up that may be shed if holders decide to lock in the gains.

The recent rise in GFOX followed a promotional email at the end of last week from The Stock Junction, and a padding of press releases promising extreme success of the Nevada drilling projects. The very upward momentum of the company may also act as a self-amplifying factor for further price growth, or it could be the high position from which the dumping of shares and the fallout would start.

But investors’ forums show awareness that the doubling of the price is the limit of this run. And just as GFOX is taking off, there was the recent press release of a sale of 80,000 shares at $1 per share sale price, to finance immediate plans and operations. GFOX has just 35 million shares outstanding after an 1-for-8 split last summer, and there is still enough space for dilution. What is still more hopeful is that for an exploration company, GFOX is still not buried in debt:

• cash: $6,289

• current assets: $14 thousand

• current liabilities: $36 thousand

• no revenue since inception

• quarterly net loss: $317 thousand

But this is still no guarantee that the company would survive, as many small-cap businesses arise to take advantage of various novel modes of oil drilling. Still, oil and gas tickers often enjoy their day in the sun, especially touting the Bakken geological formation as the inevitable source of revenues. The oil sands and gas shale in parts of the US and Canada are the bread and butter of many rising OTC tickers.

Formcap Corp. (OTCMKTS:FRMC) is a great example of a company that enjoyed its brief fame, only to slide back to a lower range once the promotional emails went silent. Just as FRMC was almost certain to break above $2 and continue the run, the ticker crashed and is now hovering around the 40-cent levels.

For First Titan Corp. (OTCBB:FTTN), another higher-tier company, the $2 mark also turned into a price ceiling, and the rebounce took the ticker only as high as around 70 cents.

If we trust our past experience, GFOX will start the fallout of its stock price rather sooner than successful drilling. Choose your entry position and time period well, to avoid getting caught in setbacks as with other promoted oil stocks.