Torchlight Energy Stock Is Extremely Overbought

Shares of Torchlight Energy Resources, Inc. TRCH have been on fire., doubling in price in just a few days, but the rally may be about to end.

The bottom part of the following chart is the monthly Relative Strength Momentum Indicator. It shows that Torchlight is the most overbought that it has ever been in its decade-long history.

This means it's trading at an extreme over what would be its typical or normal trading range.

These overbought conditions will bring sellers into the market. They will be expecting a reversion or reversal back into the normal trading range. This could put an end to the rally. It may even cause the stock to drop.

See Also: Torchlight Energy Offers Special Dividend, Stock Surges 70%