Thursday December 17, TAG OIL UPDATE

After the market closed yesterday, Wednesday, December 16, I stated:

“Great press release from TAG OIL this morning resulted in a huge move today. As you can see from the chart Tag Oil closed up $0.46 today to close at the high of the day at $1.99 on significant volume of over 274,000 shares.
I would expect some further bullish activity early in tomorrow’s trading session for those market participants who might have missed today’s release.”

Although I said that “I would expect some further bullish activity early in tomorrow’s trading session”, I did not expect how the day would unfold and the strength of the trading activity.

TAG OIL opened quietly at $2.01, up just $0.11 from the previous day’s close, but quickly gained momentum and by 10:30AM had broken out on the upside and traded as high as $2.90 up 50% in just an hour of trading. As often happens with such sudden jumps in price, many shareholders missed the move and jumped in the market with sell orders which caused the stock to give back half the gains of the day. However, what a great two day move. The stock closed today at $2.55, up $0.56 on the day, a gain of 28%. That equates to a two day total gain of $1.02. WOW! We must also remember that on October 2 TAG Oil traded at $0.52. In just over 2 1/2 months we have seen the stock price rise 400%.

So now the question is : How high the TAG? From a technical standpoint, I expect more strength tomorrow but with all strong, sudden price moves, a retracement is not only expected, but healthy. Viewing the chart I would expect over the next few days to see TAG trade back down to the $2.10 to $2.20 level where I would expect strong buying support.

However, discounting my technical observations allows me the opportunity to view this huge upward move with a very basic observation. Where there’s smoke there is fire and Tag Oil is “ablaze”.