RE: Gas Frac Price weakness

Per one of my research sources, one of Gas Frac's customers had an accident UNRELATED TO GAS-FRAC, and we expect Gas Frac to suffer collateral damage in the market as a result.  Here is what I got;

There may be weakness in the shares of GasFrac (GFS-TSX)as a result of a story that  CBC, has reported (accurately) that an explosion at a well site operated by Husky, one of the GasFrac’s largest customers, injured 14 people. Seven of those injured were GasFrac employees, GasFrac CFO Jim Hill confirmed.

But the accident was not due to anything done by GasFrac, said CEO Reid MacDonald.

“I also heard the CBC story. Not informed and incorrect. Husky, not us, had a well bore release at the well head which resulted in a fire and injuries.

“We were to frac this well later in the day and that is why we were there.”

While the CBC story did not specifically say it was a GasFrac accident, the story did intimate that – and that may create some nervous selling tomorrow.  That was incorrect, and depending on the size of the dip in the morning, I may be a buyer.
_____________________

Here is the CBC Story
Twelve people are now reported injured in an explosion and fire Monday at a sweet gas lease site outside of Edson, Alta.
The explosion occurred around 11:45 a.m. MT at a Husky Energy site near the hamlet of Robb, 37 km southwest of Edson.
Three people have been taken to a burn unit in Edmonton, but police say none of the injuries are life threatening.
No one was killed in the blast.

An ambulance believed to be transporting injured workers drives away from the site of the explosion Monday. CBC
The Edson Fire Department was called to the scene and quickly put out the fire.
Alberta Occupational Health and Safety investigators arrived at the scene late Monday afternoon.
Jim Hill, chief financial officer for GasFrac, told CBC News that seven of his employees were injured. All were treated and released at the scene.
Hill said the employees were preparing to "frac," which is a process used to fracture rocks, so that gas can be extracted from the ground. But the process hadn't started yet.

Some of this is covered in "The Playbook", some in the regular letter.

This can be painful.  It was painful for me to think it happened to one of my subscribers, but it may have.

To some extent, this small group of investment speculators have gottne some collective scars inflicted upon  us by some very unscrupulous people, with whom I always have a bone to pick, or I would not write for DenaliguideSummit.

One group I am afraid we may have encountered today is MARKET MAKERS.   Quite simply if MARKET ORDERS TO BUY OR SELL are entered before the open, the investors placing them can be victimized.

An example called to my attention by a subscriber whom I shall call NED, IM'ed me as I was composing PPP # 1224,  that a pick, QBC had opened UP at 1.08, whislts closing the night before at .78, up about 38%   OUCH !!  Ouch because it then fell back to .81.  I selected this stock this week, as IMO, it is ready to run. Guess the Market Maker thought so too.  The order to open was less than 5,000 shares, an amount affordable by most of us, and IF it was all on the BUY side and little or nothing showing on the SELL side, well the Market Maker could take it where they wanted ! ! ! !  That is my analysis.

I think the stock will surpass 1.08, as that is about its old high of 1.21, but it spend some time at 1.08 as well.

Moral to this story is watch the open or wait an hour, then find the ask, and  IMO, then the best thing to do is set a  limit buy order at the ASK if you want the stock. Using a market order will get you skinned 95% of the time.

New selections posted here and on ADVFN

QBC,   U$ 0.78  -AMEX, STOP 0.69, energy, + nat gas, very responsive to cycling, traded it a couple time this year already

CZZ, ,  U$ 13.19 - NYSE,  STOP 12.00 Brazilian Cane sugar and Ethanol leader,  food and fuel tied together,

BNC,  $CAD 1.44. TSX - STOP $1.20  Canadian Human and Animal Healthcare  PINK SHEETS SYM = BNHLF

CNE,  $CAD  1.61  TX-V - STOP $ 1.30 Latin American Energy Operator            PINK SHEETS SYM = CAAEF

ABM, $CAD  0.26  TX-V - STOP $ 0.21  Canadian Materials Supplier and Explorer  NO pink sheet symbol as yet, subject to further investigation.

LONG Entry at your choice, the stocks, IMO are in a BUYZONE and set up for potential reversal.

DG

OK this is a re-test of a previous bottom area, and thus I think we are there

Any number of stocks we are tracking on ADVFN are systematically moving forward while others retest bottoms going back to Jan and Nov, in normal cycles just like the tides.  Waves of buying and selling will come and go and break over us but if you bought with care, you will handily withstand these waves of sound and fury signifying nothing but a deeper but less voluminous bottom.

  I expect some stocks stops will be triggered, and as is typical with bottoms, they will rally again.  If they are in our list and barely hit their stop, you may decide either to rebuy them or hold off.  Personally I would sell them, and then decide to re-deploy the proceeds, "Doing more of what Works, and Less of what Does NOT !"
Since this is a bottom area, you may well buy stocks  you now like better that are showing resistance to decline or strength of advance.

CMA.V, RXE.V, HLO.V, VMS.V, QBC, AZ.To, AZM.V, plus DGS Core Stocks all have my interest now.

Good Luck, hope you have some dry powder.  Work  your way into the market on this decline, for maximum positive capital leverage.

DG

Now lets focus on the previous example and relate it to NOW

Wish that I could get it larger but can you tell that I am an analyst and not a graphics designer?  I think that's easy to see.

Now.  look back to November when Silver was cresting.  The RSI, which is about Momentum within a Trend, was in an extreme position, and tends to stay
"embedded" in that way, until it drops out.

Note that when it drops out is foreshadowed by a move in the MACD.

This current move is a bit more in terms of amplitude, and hence the MACD is more pronounced and extreme, but IMO, it will do a good job of calling your attention to ALERT you when a move is topping in THAT TREND.
   IMO, your next question, should be, "How long a trend are we talking about ?"   Typically in a DAILY chart using default values of 12, 26 & 9 for the MACD and a 14 day long period for the RSI, I think a Month is a reasonable timeframe of a trend.  Does that mean the Silver Upleg expires one month after it starts?  NO, imo.
However, I'd say that after an 18 market day upleg with only the most minor of adjustments,  this trend COULD
start to de-accelerate, and the MACD will clearly show that.  How or how far will it do that ? Typically in strong up-moves, the price can bounce back up from the 20 Day Simple Moving Average which sits at 29.15 USD.
Now if we further expand our buffer zone to consider + or  - 5% of that 20DMA line, we can get an upper bounce zone of 30.60 and a lower bounce zone of 28.00.  SO, I'd be watching the MACD for signs of softness and then the 20 DMA "Bounce Zone" from 30.60, down to 28.00 to absorb any correction, like a trampoline.  Personally I think $28.00 would be such a great buy that I'd re-buy the position all over again, were it to go that low.

Whether we get a correction or not, I have a minimum objective of about $35 for this leg, and perhaps a "HEAD FAKE" style correction, and then a move towards $50.  Those are concepts, not promises.

Thats my SIMPLE analysis.  In keeping with K.I.S.S,    I simply post the results of the more involved analysis.

Meanwhile, good luck. 

Silver donut

A very quick post of a pix.  I will be on the road today so I needed to capture this picture from my office computer so I could post about it later today.

Needless to say it is the "Silver dounut" you need to keep your eye on, like the saying, "keep your eye on the dounut, not the hole"

As you can see I put a box around the area I am watching closely, the MACD.

IMO it will take a lessening of the slope of the MACD or a downturn to signal the same in the climb of silver.

More later.

Best,

DG

This blog is now limited to Subscribers

and in my next post I will be featuring my coverage of Silver for the rest of the current upleg of the trend.  With any luck I will be able to publish this on Sunday !

Thanks for checking in.

DG