Junior Oil Sands Charts
posted May 21, 2006 at 12:51AM
I don't hold this right now but it is definitely on the watch list. This is for the most part still a speculative drill roulette play with associated risk. Usually when a stock has a big run, and then retraces to the point where the weekly stochastics get reloaded, you usually get at the least a very tradeable bounce.
There is a conventional train of thought out there though that says when the 61% fib support is broken, that the market is saying there is something fundamentally wrong with the stock.
So I am in watch and shoot mode. Conservatively one can wait until they come out with some results, and even though you will pay more, the upper end potential will make it a good buy.
The other tactic is to keep an eye on the bid side of things, if you are actively monitoring things, an see if there is any unusual piling up of bids ...then that, along with its technical condition, and if crude holds the breakout point and with a stop loss provision would make for a good trade.
Although other stocks get traded, this is the one I have hitched my "buy and hold" mantra to. The First Nations group is now on board with the project. there is still an issue of compensation to Parmount about some natural gas wells that they won't be able to develop. This is par for the course, and the Alberta governement has made it clear that the oil sands have priority over natural gas. I for one cannot wait until that piece of paper is signed off.
A revised reserve report is also something I am expecting this summer. All the comments made by the CEO suggest that it will be a bullish one.
Still flopping around between resistance and support. I did not like the break of the 50 dma. There are no "obvious" trading situations right now ... watch and shoot.
This stock has blue-sky potential, and speculators drove this one up with a vengeance. But potential is all it has, there is still no formal "meat", (i.e. reserves) for investors to hang thier hats on. As such it is vulnerable to hot money leaving in a hurry. This chart looks very vulnerable to me especially if they don't come out with some fundamental news to justify why investors should stick around.