Monday, January 30, 2017 12:19:51 PM
CNE.TO - never went higher and here is great buy opp...
..I sold about 90% of my CNE in December when it didn't break out upwards from consolidation channel dating back to June. I bought most of it back this morning at $3.88 with thesis that this could be the biggest selloff in 2017. Story hasn't changed and CNE is forecasting for a second pipeline to add 40 MMcfd by the end of 2017. While in reality, this will likely be a few months delayed, I don't think we'll see this type of selloff in H2-17 so therefore CNE unlikely to selloff like this again in Feb-June.
If you can get under $4.00 I think we'll see CNE at over $8.00 in 2019 when the third pipeline gets commissioned (+ yet another 100 MMcfd).
If history tells us anything, CNE.TO will continue to be a great trading stock with an underlying fundamental story that is super stable (contracted pricing, growing production, strategic producer serving coastal natural gas shortage to power plants). Sell at an RSI >=80 and buy at RSI <30 for the next couple years. This has worked well for me in 2016.
I think the selloff is combination of shareholders getting frustrated after CNE broke lower after 6 month consolidation, O&G investors who parked money in CNE during the O&G bear and are now rotating out into more speculative plays, and general technical momentum downwards. IMO of course.
Furthermore, in 2015 and 2016 Canacol put in its annual low in January. . December 2014 was the bottom of the O&G rout and this was when the story emerged that CNE had transformed itself into a contracted natural gas producer and acquired Esperanza in a sweetheart deal.
A dividend would help to stabilize CNE.TO.
Here is the latest presentation. Slide 9 tells the story through 2019. Also some great slides comparing CNE economics to North American gas plays.
http://www.canacolenergy.com/i/pdf/ppt/Corporate%20Presentation_1.10.2017.pdf
..I sold about 90% of my CNE in December when it didn't break out upwards from consolidation channel dating back to June. I bought most of it back this morning at $3.88 with thesis that this could be the biggest selloff in 2017. Story hasn't changed and CNE is forecasting for a second pipeline to add 40 MMcfd by the end of 2017. While in reality, this will likely be a few months delayed, I don't think we'll see this type of selloff in H2-17 so therefore CNE unlikely to selloff like this again in Feb-June.
If you can get under $4.00 I think we'll see CNE at over $8.00 in 2019 when the third pipeline gets commissioned (+ yet another 100 MMcfd).
If history tells us anything, CNE.TO will continue to be a great trading stock with an underlying fundamental story that is super stable (contracted pricing, growing production, strategic producer serving coastal natural gas shortage to power plants). Sell at an RSI >=80 and buy at RSI <30 for the next couple years. This has worked well for me in 2016.
I think the selloff is combination of shareholders getting frustrated after CNE broke lower after 6 month consolidation, O&G investors who parked money in CNE during the O&G bear and are now rotating out into more speculative plays, and general technical momentum downwards. IMO of course.
Furthermore, in 2015 and 2016 Canacol put in its annual low in January. . December 2014 was the bottom of the O&G rout and this was when the story emerged that CNE had transformed itself into a contracted natural gas producer and acquired Esperanza in a sweetheart deal.
A dividend would help to stabilize CNE.TO.
Here is the latest presentation. Slide 9 tells the story through 2019. Also some great slides comparing CNE economics to North American gas plays.
http://www.canacolenergy.com/i/pdf/ppt/Corporate%20Presentation_1.10.2017.pdf
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