ERHE - Erhc Energy Inc - Page 6

Not just hope or the break-out from the six month channel at a decadal low.

There is also a news event for ERHE expected soon. They will be announcing whether Sinopec and its subsidiary Addax Petroleum will be continuing their exploration in ERHC's JDZ blocks or not. If they are continuing, the operator will either commit to more drilling, or just ask for an extension.

So in this case the break-out on relatively high volume could be an indicator that the news is favourable, or just a new position that believes it is favourable. Sometimes this kind of price action precede news events with ERHE.

The bull flag/coil of the last six days is less important, IMO, because there was a return to normal light volume.

If the news is delayed, then we will likely retest the new support at .10 or return to the 6 month range. Alternatively, if the news is not appreciated we will expect to see a break below that range.

The challenge in waiting for confirmation with ERHE is it's history of making rather steep rallies and sell-offs.

ERHE has a history of reaching ~800% above the current low, which is a share price that has historically been a significant low.

Alternatively, the downside risk is capped at 12 cents, so the position can be sized accordingly with a high reward to risk ratio.

On the weekly chart I've put a green arrow below the 2008 rally and the 2009 rally.

With 2008 there was an initial pull-back, and then a rather quick run-up.

With the 2009 rally it went in spurts, so there were a few pullbacks on the way up for a more confirmed entry.

I am guessing that the unusual (for ERHE) six month flat period and tight range would give an indication that if a rally occurs, it will be more like the 2008 one. Steep and fast.

Alternatively if the news is bad there will be a quick sell off, as the charts also show.