Stone Energy Corporation (NYSE:SGY) Dropped Out of the Trading Channel

[[tagnumber 0]]Shares of Stone Energy Corporation (NYSE:SGY) unfortunately match completely the performance of the entire energy sector, breaking through all support levels and becoming attractive for shorting this month. SGY recently released an optimistic drilling update, yet now a few days before its earnings come out the stock price may drop even further down.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]SGY tanked another 8.74% on Monday and closed the session at $6.89 for a share. Trading volume got higher than in the previous session, which is not a good sign for a possible upward correction any soon. Technical indicators on SGY chart do not suggest that as well, all falling down towards the lowest levels.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]Yesterdays close is at least a fiveyear bottom and although the companys recent financial reports did not signal any improvement, fundamentally the stock value should not go much lower on the longerterm. Second quarter earnings release is scheduled for Monday next week though, which should make the stock get really volatile, and possibly hit another low.[[tagnumber 1]] [[tagnumber 11]][[tagnumber 12]][[tagnumber 1]] [[tagnumber 0]]Earlier this month, SGY announced in a press release that works on its Cardona#6 development well located in the Mississippi Canyon Block 29 were proceeding ahead of schedule and below budget, and as soon as production begins the well would reach 65% of the working interest by September. That cannot help the company significantly though at this point.[[tagnumber 1]] [[tagnumber 11]] [[tagnumber 1]] [[tagnumber 11]]In the first quarter, its revenues dropped massively and the net loss nearly doubled. Operating cash flow appeared still positive, however, it should be considered that the company reported huge writedowns of oil and gas properties without which operating cash flow would turn negative. If it stays negative for the coming quarters, that would imply longterm losses for shareholders equity.[[tagnumber 1]] [[tagnumber 11]] [[tagnumber 1]]

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