Denbury Resources Inc. (NYSE:DNR), a domestic oil and natural gas company, is naturally affected by the extreme low price of Crude Oil. The stock has been in a declining mode for 7 months out of the last 9 months, coming down to $6 levels from $19 levels in a very short time. The statement by the International Energy Agency regarding the increasing oil surplus with the US oil production not showing any signs of slowing down didn’t help the stock price either.
Denbury Resources Inc. (NYSE:DNR), had reported an earnings per share (EPS) of $0.27 for the last quarter against the expectation of $0.23 but the company took the real hit on the front of the revenue with $480 million coming from the quarter against the expected $566 million. So the EPS remains the same on a y-o-y basis but the revenue saw a drop of 19.5%. The street expects the company to post improved earnings of $0.38 for the current financial year.
Technically, the daily chart doesn’t provide anything encouraging about the stock. The stock hit a short term bottom at $6.04 in December 2014, followed by a labored bounce to $9 levels in the next 2 months but no real sign of strength is visible yet. One could argue that the stock is taking the form of a Bearish Flag pattern, which, as the name suggest, is a bearish consolidation pattern. The Friday volume at 76 million was astonishing against the average volume of 15 million and there was no great range expansion on that day.
On the other hand, a glance at the long term picture shows that the price is very close to the 2008 bottom of $5.59 and it is already finding support from the 1997 high around $6.00-15 levels. Investors may keep an eye on the price reaction around $6 for some slow accumulation.