Blugrass Energy, Inc. is engaged in the business of oil and gas exploration and development. The Company is focused on exploration and production of oil and gas properties in North America and has interests in producing oil and gas assets, and has longer term exploration assets in the United States.
News in a Hot Sector
After hours on Friday 4/9/10, Blugrass Energy announced that they had entered into a Memorandum of Understanding with DeepExpro, LLC, a privately held independent oil and gas exploration and production company based in Houston, Texas, to jointly identify, evaluate, acquire, explore, and develop various working interests and net revenue interests in oil and gas prospects.
The oil and gas sectors have been red hot the past few weeks. Stocks such as SSN, PDO, and PDGO, just to name a few, have exploded higher as oil has solidly moved past $80/barrel. In all honesty, it's difficult to gauge how significant this press release is regarding the overall prospects of Blugrass Energy. However, traders and investors are always looking for reasons to move up stocks in hot sectors. Fridays news should get noticed by those looking speculate.
Technicals
See below for a chart of BLUG.OB:
Currently, BLUG.OB is sitting at $0.195/share. As you can see from the chart, it is very close to its 52 week low. Over the last year the stock has traded as high as $1.20/share and has spent the majority of its time over $0.40/share. As a result, the downside appears to be limited at these levels. In charts like this one, a little news can often times trigger a reversal. After reviewing quite a few oil and gas stocks, very few are still hovering near their 52 week lows. Most have surged quite substantially off of those levels. I view a potential investment in BLUG.OB as low risk opportunity to catch a stock at its bottom before a probable rise.
Low Float
According to Blugrass Energy's last 10-Q, there were 50.05M shares of Common Stock outstanding as of 2/22/10. There are 24.05M shares currently owned by 5 individuals and institutions, which means that the float is 26M shares at the most. With a float this low and the share price currently less than 20 cents, BLUG.OB could rocket quickly with a surge in volume.
The Pump is On
I've never been much of a fan of those high profile penny stock pumping websites. However, I'm not too naive to understand that under the right circumstances, they can be effective tools for finding those quick moving stocks. After doing a few checks this weekend, I've discovered that quite a few penny stock sites have spotlighted BLUG.OB as a potential fast riser this week. Despite any negative feelings you may have about these sites, they do have huge followings. When you have a stock being pumped while it hovers near its bottom with the weekend used to create the buzz, chances are high that there will be sudden, strong buying interest.
Conclusion
The last oil and gas stock I spotlighted on this site was Callon Petroleum (CPE) back in May 2009. I was too early with that choice and the stock continued to lag the remainder of that year. However, CPE has been a 4 bagger in 2010 and has really exploded the last month. This is just one more example of the roll this sector has been on as of late. It only makes since for investors and traders to try and look for the next best thing. Blugrass Energy isn't necessarily one of those fundamentally strong stocks that you should fall in love with. However,I believe that the combination of news, a low float and the potential for a technical reversal and sudden buyer interest is a great recipe for quick stock gains. BLUG.OB could double quite easily and could potentially move much more. Bluegrass Energy (BLUG.OB) is the next perfect stock.
