Why I'm Bullish on Small Caps Oilsands and Energy XXI

Oil and gas stocks have been hitting my stock screens the past week or two as oil has been on the rise and light crude is setting up a very bullish looking chart pattern with some big upside potential.

Checking out USO’s chart, which is the ETF of the US OIL FUND traded on the NYSE is practically a mirror image of the Light crude futures commodity, we’ve got a very bullish ascending triangle pattern setting up here with lots of upside potential. I think we could expect USO to hit up the $60 range over the next several months based off of this chart pattern.

Technical Analysis: (Click to enlarge)

2 Small Cap Stock Picks I’m long in for the Black Service Portfolio : BQI, EXXI

EXXI: Long @ 1.88

Energy XXI (Bermuda) Limited, together with its subsidiaries, engages in the acquisition, exploration, development, and operation of oil and natural gas properties onshore in Louisiana and Texas and offshore in the Gulf of Mexico.

Current year EPS : -.007
Next Year EPS: .31

Current Year Revenue: $378.5m
Next Year Revenue: $578.6M
+53% Estimated Revenue Growth

Fous Fair Value: $4.56
Current Price: 1.88
+145% upside potential

Technical Analysis: (Click to enlarge)

BQI: Long @ 1.27

Oilsands Quest Inc., a development stage company, engages in the acquisition, exploration, and development of natural resource properties in Canada.

BQI has not reported any revenues or profits. This stock is being held up by a bullish industry and is being pumped by stock promoters. On top of that, this stock has a very bullish stock chart setup which is currently bouncing @ support right now where i alerted the Black Service crew for entry @ 1.27. Initial profit target here is around $2/share.

Technical Analysis: (Click to enlarge)

Comments

[The Economi...:]

You picked an obvious day to write about this company. Bravo.

But thanks though, I had this stock talk weeks ago.

Oct 19 06:43 PM

[The Economi...:]

Oh and there have been numerous articles projecting this as a $4-5 stock. You're too late to the party.

Oct 19 06:45 PM

[davidbdc:]

No revenues nor profits? And the primary "good" part of the story is that its being "pumped" by stock promoters?

No thanks on BQI

Oct 20 06:23 AM

[Cameron Fous:]

what is this the yahoo finance message boards? I'm a technical analyst. I play stocks on the move with momentum and volume.

Oct 20 12:01 PM

[MikeCooper:]

david,

I agree the author seems to be trying to damn BQI with praise. But do your own DD. BQI is an exploration company with leases on some very promising (confirmed in testing) properties. They are working to perfect their method for extracting the bitumen (the geology of the region precludes traditional SAGD methods). Management has stated they are not even trying to enter into a joint venture until this is done to ensure maximum leverage. So the lack of profits at this point is as much a strategic decision as anything else. With oil prices rising, and BQI sitting on such valuable assets, the interest is there.
A risky stock to be sure, but a far more intriguing bet than the author suggests. And that line about "pumped by stock promoters"? I have no idea who he's talking about unless he means the usual blog rats and Yahoo message boarders. Throwing a accusation like that out without naming sources is unethical.

On Oct 20 06:23 AM davidbdc wrote:

> No revenues nor profits? And the primary "good" part of the story
> is that its being "pumped" by stock promoters?
>
> No thanks on BQI

Oct 20 12:04 PM

[Cameron Fous:]

BQI is strictly a technical trade.. momentum and a very bullish chart pushing this trade. If i can pull 20% in a week then awesome.. If not i get stopped out for a small loss. That's trading, on to the next one. Come talk trash when you have nearly +1800% return over the past 3 years documented in real time @ your website with trade alerts and countless member testimonials who have been with you for years. You sound like a bunch of investors.

Oct 20 12:09 PM

[Cameron Fous:]

Mike cooper.. Come on buddy.. the latest headlines for BQI are stock promoters haha... lets wise up a little here.

# Skymark Research Initiates Independent Research Coverage On Oilsands Quest Inc.GlobeNewswire(Tue 9:00am)

# StockPreacher.com Issues Trading Outlook for Oilsands Quest Inc.GlobeNewswire(Thu, Oct 15)

Oct 20 12:11 PM

[Uncle Pie:]

Why fool around with speculative issues like BQI when you can own the premier oil sands companies which have been producing oil and paying dividends to shareholders for years and years? All have prospects for increasing production and all have reserves of 40 years or more with no production decline. Check out the investor presentations at the websites of Canadian Natural Resources CNQ, Canadian Oil Sands Trust COSWF and Suncor SU for the details. This writer owns shares in all three companies...this writer finds it hard to find something he'd rather own long term than a 40+ year supply of oil in a politically secure place right next door to the biggest oil consumer in the world.

Oct 20 08:34 PM

[BillV:]

You will always find the promoters and the shysters around almost any low price stock. BQI is an interesting play though; I've followed them for several years and owned them for just about as long. Yes Louie, I bought the stock when it was a lot higher priced and held. I've also bought more since I believe the management of this company, although skating on thin ice, will make this company profitable one fine day. Remember, they have alot of debt to pay off first. I feel they will look to merge or be taken over once they start producing revenue. They still look like they are in the acquisition mode ready to buy more acreage when it appears. Extracting the oil (with the inherent high costs) will still prove to be the major roadblock in addition to the mid-stream transportation costs. All in all, BQI is really speculative, but the upside may prove to be rewarding.

Oct 20 11:56 PM

[Cameron Fous:]

Uncle pie im a small cap swing trader/day trader.. I dont even know what a dividend is ;) BQI is a speculative beat down stock with some strong upside potential based on hype and momentum, technical analysis and a bullish energy sector. Its up 8% this morning.

Oct 21 10:02 AM

[Cameron Fous:]

hmnnnnn BQI up 25% today... how odd it would do something like that ;)

Oct 21 01:59 PM