Investors have been watching King Resources Inc. (OTC: KRFG) for some time after becoming current. Now momentum is building around the company after a 22% price spike on October 15th. For some investors, KRFG is a high conviction play as they hold long term in anticipation of a merger. But this recent price spike could be a signal that KRFG is one of the penny stocks that will explode soon.

Catalysts

This summer, KRFG settled its convertible notes through a private party purchase. A relic from 2014, those notes had a value of $450,000 and after removing this liability, the company issued controlling shares of Preferred C stock to interim CEO, Caren Currier.

Well-known in the OTC, Currier is a classic merger consultant whose work routinely produces great results for shareholders. In addition to handling other custodianship plays, Currier is the current CFO for the investment holding company FCCC, Inc. (OTC:FCIC) and One World Universe Inc. (OTC:OWUV). Her strong track record is a bullish sign for many investors.

The company changed control in 2018 to pursue a new business direction. But in the past, KRFG was oriented towards the oil and gas sector. At that time it engaged in exploration and development projects in Utah, Louisiana, and Texas.

However, KRFG has since stated its intent to enter a share exchange agreement with the shareholders of a private corporation – likely located in China since the transaction will occur in accordance with the laws of the PRC. For this to transpire, all or part of the shares issued by either KRFG or the private corporation must be exchanged with those of the other. Of course, this plan of exchange must be adopted by both boards of directors as well as approved by their shareholders. If successful, the private company will become the wholly-owned subsidiary of King Resources Inc. 

KRFG has been receiving more attention after releasing its quarterly report and some investors are anticipating a merger announcement in the very near future. Currently, KRFG has 3 billion authorized shares of which 1.9 billion are outstanding, giving it a relatively low float of 995 million. As of September, KRFG has also accumulated a deficit of $17,807,920.

Media Sentiment

Looks like @ecgreendays is anticipating huge volume for KRFG soon

Technical Analysis

penny stocks that will explode KRFG chart

Despite spiking up on the 14th, KRFG has dipped and is now trading at $.0162. The stock has a support near .0153 and a secondary support at .0140. The stock’s resistance also lies at .021. Currently, the MACD appears poised for a bearish crossover but remains on the upside and the RSI has corrected to 49 after becoming overbought on the 15th. Accumulation is also increasing after building up since the end of September.

Should You Buy?

With many investors holding KFRG with high conviction, the stock’s value is likely to increase. But other investors are still waiting for a merger announcement from the company’s management. If momentum continues to build, KRFG could hit October’s high of $.019 or higher with news of a merger and may become one of the penny stocks that will explode.

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