TAG OIL UPDATE: February 2, 2010
On January 29, I wrote:
“In fact TAG OIL [ticker symbol: TAO on Vancouver Exchange] did trade down over the next two days, bottoming out at $2.15. We have now seen 5 consecutive up days and today the stock closed at $2.50 for a gain on the week of $0.28. Considering that the TSX index sold off 249 points this week, the Tag Oil trading performance was great.
As you can see by the chart we are developing a strong support [RED] line that began in late October and which would provide great support at $2.15 to $2.20 should we see any retracement of this weeks gains. I do suspect that any retracement would first encounter support on the shorter support channel [ GREEN] line in the $2.25 to $2.30 levels.”
Well, TAG OIL did not give back any of the gains from last week and here we are just two days removed from my previous comments and the stock exploded on the upside today, trading as high as $3.39 before retracing some of the gains to close at $3.04, plus $0.34 for the day on 461,000 shares.
As you can see by the chart, a mere 3 months ago TAG OIL was trading at $0.55. I always caution that with such an abrupt rise in price that some retracement should be expected and can be viewed as very healthy. This stock has been reluctant to do so.
Tomorrow may see some more selling from any traders who missed today’s run-up but any weakness should meet strong support at the first major level of support at $2.55.
However, such a bullish move recently strongly suggests to me that a great news release may be close at hand.
