NEW BULLISH Plays
Kodiak Oil & Gas - KOG - close: 7.37 change: +0.27
Stop Loss: 6.75
Current Gain/Loss: unopened
Time Frame: two to three months
New Positions: Yes, see below
Why We Like It:
KOG is a small oil exploration and production company focused on the Western United States. The company is ramping up production. In their recent earnings report KOG reported bottom-line numbers that were in-line with estimates. Revenues were up more than +260% but that still missed Wall Street's revenue estimate. Shares didn't move much on the earnings news.
Not only is KOG a momentum play (look at the move off the October low, whew!) but it's also a takeover trade. KOG is small and growing and these days it is easier for larger oil companies to just buy existing production instead of finding it.
The stock has struggled with resistance in the $7.40-7.50 zone for months. I am suggesting a trigger to open bullish positions at $7.51. More conservative investors may want to wait for KOG to actually close over $7.50 before initiating positions. We will use a stop loss at $6.75. Our multi-month target is $9.75. FYI:
FYI: The Point & Figure chart for KOG is bullish with a $13.75 target.
Trigger @ 7.51
Suggested Position: buy the stock @ 7.51
- or -
buy 2012 MAR $7.50 call (KOG1217C7.5) current ask $1.25
Entry on November xx at $ xx.xx
Earnings Date 03/05/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on November 5, 2011