Connacher Oil and Gas Update
posted Apr 26, 2006 at 11:36PM
Connacher Daily Chart
Connacher Weekly Chart
Well as you can see from the above the consolidation pattern has broken down. Why? Well just as the market was waiting for provincial approval, the word came out that a First Nations group has submitted a "letter of concern". Why so late in the process and not seven months ago? I can only speculate that this was timed to give them more bargaining power. I must admit this kind of stuff really brings out the right winger in me ... but there it is.
Anyways the Great Divide Project can't move forward until this has been dealt with and the market is currently pricing in the added risk.
For me, my current plan is to continue holding this stock. I feel the fundamental story here is of course still the same: it is just a matter of time before this administrative hurdle is dealt with through negotiations.
Now if you bought this at extreme overbought levels at $6.00 then you are in pain and lots of it. All I would say that it is my firm opinion that in time this will be a stock in double digits, although that may not occur as quickly as I had once hoped.
For those with cash on the sidelines however, the chart is for the first time in years becoming of interest from a contrarian point of view.
It is oversold on the daily and starting to approach what I would call "optimum" buying conditions. To me those are when both weekly stochastics reading are bottoming out simultaneously, and you have positive divergences on the daily charts, all as it approached some kind moving average or trend-line support.
A lot of doubters and johnny come latelies are being herded out of this stock. When the approval does come, and when that is I do not know, but when it comes everyone will remember that they have claim to a lot of oil on their properties and the stock would be in fairly strong hands.