Tag Oil Ltd. – Company Review

TAG Oil Ltd. (TSX-V: TAO) is a Canadian company exploring new sources for oil and natural gas in New Zealand. Although New Zealand may not come to mind as a perfect location for oil and gas exploration, it actually offers an actually ideal situation for exploration, generation and acquisition of previously untapped sources of much-needed natural resources. New Zealand offer a stable economic and political environment, as well as thousands of acres land of under-explored oil and gas sources. Tag Oil is aggressively pursuing these opportunities and is poised to benefit from establishing itself as an international company operating in a target rich environment. As Tag Oil further entrenches itself in New Zealand and uncovers formidable sources for the location of oil and gas production, HWS will be closely watching how this company benefits from operating in what may well be the new frontier for capturing two of the world’s most profitable resources — oil and gas.

Carl’s Comments:
At first look I would have anticipated a greater pullback after the $1.10 rise beginning October 19 through October 27 perhaps retracing 50% of the move to $1.10. However, we see only a 25% retracement to the present level of $1.30. Both the RSI [above chart] and the MACD [below chart] are bullish. However, it is imperative that the stock does not break the present level of $1.30 on increased volume or a sell off to .75 to .80 is possible.

Update
In my Tag Oil e-mail dated November 20, just 5 1/2 trading days ago, I stated; “However, it is imperative that the stock does not break the present level of $1.30″. It did in fact hold at $1.30 and closed on Friday at $1.53. This move has been accompanied by a slight increase in volume and I foresee a run this week up to test the all time high of $1.69 and perhaps trade as high as $1.85 [Barring unforeseen external market influences]

Further Update:
In fact TAG did move up nicely early this week and did test the all time high of $1.69 when on Monday it traded up to $1.68 on a volume of 112,400 shares. Tuesday saw it consolidate and trade between $1.56 and $1.65 again on decent volume of 121,700 shares. Wed.saw the stock trade in a tight range of $1.58 to $1.60 on small volume of 22,500. I viewed this action as positive!
However yesterday and today saw wildly fluctuating markets in NY and Toronto. The DOW closed today over 200 points lower than yesterday’s high. The TSX closed today down over 300 points from Thursday’s highs. As a result the early week momentum in TAG trading was stymied by the weakness in both markets. Technically TAG looks strong and any strength in the TSX index could positively influence TAG next week and once more I anticipate an opportunity for it to trade up as high as the $1.80 to $1.90 range.
Carl