3SOF

Update:

Quote from: AussieTrader on May 21, 2008, 09:02:03 AM
Horizontal drilling update. This statement quite telling and probably helping the pre market action '." Mr. Daugherty added, "The success we are having in Leatherwood with our horizontal drilling to the Devonian shale, which is present throughout our Appalachian acreage, has the potential to provide the catalyst for significant growth in our production and reserves over the long term." :

Those were good news Aussie.
Also, RBC Capital Markets published a small comment about this:

QuoteIncreasing Activity on Positive Appalachian Well Results
• NGAS announced that its 2nd and 3rd horizontal wells in Appalachia have
produced at 30-day average rates of 405 Mcf/d and 421 Mcf/d, respectively.
All three wells were drilled into the Lower Huron shale at the company's
Leatherwood field in eastern Kentucky and have shown improving results
with each successive well.
• The company's fourth horizontal was recently tied-in to sales and a fifth well
is expected on-line by early June.
• In light of the results, NGAS is stepping up its horizontal activity and now
plans to drill at least 20 wells in its Leatherwood field during 2008.
Previously NGAS expected to drill up to 20 horizontal wells during 2008.
• Overall this is positive news as the company's vertical well program was not
providing the strong production growth necessary to move the stock higher.
• We view the horizontal program as highly successful and in line with
Equitable Resources' (NYSE: EQT; $74.46; Outperform, Above Average
Risk) positive results on its acreage immediately east of NGAS.

Another positive input was a recent upgrade from TheStreet.com that now rates NGAS as a Hold (up from a previous Sell rating), I didn't have any more details from this new rating, but will try to get the research note later, if possible.

From a technical perspective, NGAS is still trading with good momentum; the volume has decreased a bit during the last two sessions, but NGAS manage to close near the recent highs. A special note to $8.89 which was the previous high (Jun 2007) and it's probably acting as resistance right now, even so I expect this to be broken at any time given the overall chart layout.
In a consolidation scenario, I expect the ascending support to work, so I believe we should keep our stop level on the same spot ($7.25) for now and try to ride this up-swing a little more.

Trading plan:
Take profits at $10. Sell with a small profit if the stock is set to close below $7.25

Regards,

Update:

NGAS is holding quite well this upper range.
We are going to upgrade our stop level a bit higher in order to adapt to its ascending support line and protect profits.

The new trading plan is:

Trading plan:
Take profits at $10.00, use stop @ $8.05

Update:

We are going to upgrade our stop level once again, in order to adapt to the ascending support line. In this case a few ticks below Tuesday low.

The new trading plan is:

Trading plan:
Take profits at $10.00, use stop @ $8.30

Update:

Today a new research note was published by Dahlman Rose Analysts; they have just upgraded their price target from $10 to $13 on higher asset value assumption:

QuoteWe are raising our price target to $13 per share from $10 as the price paid in the region continues to accelerate. In addition, we believe there is ample upside remaining in our estimate as the company books incremental proven reserves and adds acreage. Our NAV is based on what we believe NGAS’s assets would fetch in the open market. Our target is derived from a $4.05/Mcfe per proven reserve and $2 reserve price using 2007 year end results. We are using a 76% risk factor on our proven estimate, which could be considered low given the quality of the company’s reserves. We calculate that NGAS has over $2 per share alone in gas gathering value. 

The complete Note of Research for download:



Once again, NGAS has been holding this upper range quite well, managing to keep this up-swing untouched so far. If the stock manage to keep this layout in place without breaking down the support I’m expecting another big push to the upside, probably above our $10 initial target.

I’m doing just a little change to the trading plan, in case we hit $10 we’ll be selling only half of our position and holding the rest, so the new trading plan is:

Trading plan:
Sell half @ $10.00, use stop @ $8.30

how about setting the stop price higher?
natural gas is very bullish at the moment

SmallCapInvestor.com
NGAS Resources, BMB Munai and Cano Petroleum among 52-week highs
Tuesday June 17, 4:35 pm ET
Will Atkinson


NGAS Resources Inc (NasdaqGS:NGAS), BMB Munai Inc (AMEX:KAZ) and Cano Petroleum Inc (AMEX:CFW) are among the new 52-week highs in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: RAM Energy Resources Inc (NasdaqCM:RAME), Panhandle Oil and Gas Inc (AMEX:PHX), Stepan Co (NYSE:SCL), International Assets Holding Corp (NasdaqGM:IAAC), United States Lime & Minerals Inc (NasdaqGM:USLM) and Natural Gas Services Group Inc (Nasdaq:NGS).
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I see plenty of value...
What they own is worth much more than even it's present stock price.

Technicals
Record Price High
Percentage Gainer

Last Price Quote is:
10.05%above 13-day MA
24.48%above 50-day MA
RS Rating: 97 

Fundamentals
Key Data:
Market Cap (M): $233.74 
P/E Ratio: 153.54 
PEG Ratio: N/A 
Next Earnings: 08/05/2008
Last Analyst Rating: Outperform

Quote from: la-onda on June 17, 2008, 10:00:46 PM
how about setting the stop price higher?
natural gas is very bullish at the moment

Hi la-onda, we're selling half of this position @ $10 (or above, if today's open is above $10), doing this we'll be decreasing our risk in this position, giving us more room to ride this up swing (if possible). But yes, we plan to increase our stop level soon (probably near to $9).

Update:

Yesterday's session was another breakout with strong volume into a new 52W high. NGAS is now near our initial $10 target and its setting up nicely for a possible upside continuation.

We are selling half of our position in NGAS @ $10, and we'll keep the other half with the intention of riding a possible continuation (probably above $12). For now the trading plan remains the same:

Trading plan:
Sell half @ $10.00, use stop @ $8.30

Half of NGAS position was sold at $10.02 at the open.

Update:

I was expecting a bigger correction for NGAS after we reached our target @ $10, probably to $8.50, but until now NGAS has been consolidating above $9 which shows a lot of relative strength at this point. $9.25 is also a reaction zone we should mention and has been working properly.

NGAS broke down its ascending support line, this isn't necessarily bearish, this just means that the previous layout has changed, it can still go higher into new relative highs, just with a different layout. The 50-EMA stands near $8.50, we'll keep our stop slightly below that key area and continue to hold our half position in NGAS.

Trading plan:
Hold half position with stop @ $8.30

Remaining 1/2 position stopped @ $8.30

updated chart look...