Ok having reviewed Jkx oils last week with a BUY target we look at a short position. I thought about the recently tipped short on Ocado and although I agree with Zak and Tom I see the short presenting a 114p initially.
After a browse through the books and a weekend at one with nature I caught up with every ones friend the K.O.S (King of Swing) Chiffa. He does not disagree with the Ocado short but dragged my attention to IG Group Holdings with his view on where the shorts lie. I'm not here to argue with God so I also concur IG does look at the top of its game and when this happens the price usually declines.
IG Group Holdings: Short or Sell that position
(494p on a flat/pos open ftse and 488p falling open ftse)
We also look at the stocks that could go either way, These are stocks to watch and wait for confirmation of there trajectory
Europa Oil and Gas
These companies have fundamental news and technical indicators to show that further ups or downs are pending a safer player may wait for a more suitable stance, After all there's a big bad world out there.
The Mills Moving
Ok the rumour mill is turning once again on our favourite Irish led Gxg listed US Oil&Gas (Usop), After what was a terrible end to 2012 with the suspending of the stock and the listing on the clearly difficult to circumnavigate platform of Gxg markets Usop has risen like a salmon and fell like a stone on what can only be described as idiosyncratic happenings.
I posted on twitter today a thought that is very true in this world and that's to never believe all of what we read and hear. I personally felt that Usop seemed crazily over valued on what was really nothing more than bloody good potential in a wildcat well and drilling campaign and at 650p it was always going to get the attention of the bears. The very reason this stock rallied to that level was based on a very bullish Unregulated pump campaign in words and quotes on a awesome collective front.
So between the super negatives of the bears and the sensational positives of the bulls its time to take a layman's glance at whats happening today.
It is my belief that Wildcat drilling holds a general c.o.s conversion rate of around 17% I'm also of the belief that the currently listed market is unsustainable in coping with any news from Usop weather good or whats deemed bad as it seems to have a unique effect on the SP which is not good for any of the smaller retail players involved. The roller coaster is damaging and unfair. Extreme Highs and lows are killing confidence.
Lets look at that.The company is rumoured to be flowing (via testing) for a little while now which can only mean Booom! ' In Brian we trust '... Not so quick guys, The rumour could in fact be very true and the fact that hydrocarbons are there would mean rightly the wildcat has delivered on flow an'all. It is likely that the company will flow test for 2-4 wks and once they have analysed there data there will be a follow up Rns after the one which will come from this activity.
I hear people say ' they had 6months to analyse the data ' Wrong! The Oil and Gas game does not work like that, Folks can't just flow test without a receptacle/Tank for this to flow into, Weather its a Lift tank or a road barrel of sorts they may have cleaned the well up from obstacles and down hole waste (Normal practise) However that does not mean they have acute flow data, Also the flow test data they do glean from ft-results may or may not be that of the final flow results.
Now Over to the upside, If Usop can deliver then this will commence in multiple releases of data. Not all at once, So when the stampede takes place should the F.T results come in over the next few weeks, Try and remain grounded. If the market can't cope what will happen? If the Share price reacts in one more peculiar way what will happen? I would hope that the company can find a relevant listing to what may or may not be a significant find of Oil.
Clearly US Oil&Gas have had a catalogue of questions hanging over there governance and this really needs to be transparent and far more open to the shareholder which my reignite not only current shareholder confidence but also future investors.
The CEO may want to consider the negative impact that unregulated and unreliable pumping or de-ramping of this stock may have, I do not recall anyone stating they were looking into the unprecedented level of ramping and pumping of the company for nearly 2 years!!! Strange how they only focus on the de-rampers. Reality is Usop should look to find a equilibrium and temper all none sense related drivel and become more pragmatic in conveying the story as they see it and in manner which correlates with market regulation.
(Again I only reiterate what Plus and Gxg have stated and nothing more)
US Oil and Gas: A company that has the potential to ignite the micro market of gxg into overload or to empty the pockets quicker than Dick Turpin.
Remember guys I'm about as popular as salman rusdie after the release of satanic versus but at 600p there was only a small number of people who could see a contrary offering to the twoddle on offer in 2H 2012.
In my opinion anyone buying stock sub £1 in Usop has a darn good chance of making a pretty penny if the Chinese whispers of FT of EB1 are in actual fact and after what seems a life time of soul searching I'm actually starting to feel alot warmer towards the company.
What will happen with the high level of water cut from EB1? Sell it to the Arabs I hear!!! Sadly there are many intellectually presented calculations that are laid down and sworn in as FACT! conservative speculative facts on value, The truth is Usop could reward on one tenth of there recovery.
''Layman's, Try and focus on what you understand and not on what the authors of these posts proclaim to''
Is it a investment to me? Probably not as the GXG markets a tough arena and one which can make sleeping at night difficult. However there is clearly money to be made from Usop should you have the correct position and ignore the global chanting of (strap your self in were taking off) OR (This is a dog,duster,dead)
I hope to have a more reasoned opinion of the company in the coming weeks and months with a view to Buy,Sell or Hold
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Disclaimer: The above is a reasoned opinion derived from years rodeoing the markets and deciphering the bullshit that group mentality creates