Friday, January 14, 2011

Gas Natural Inc. Buy, Hold or Sell?

This one for our regular visitor of The Market Oracle - Joi who requested help on the analysis of Gas Natural Inc ("EGAS").
Click on the above image to enlarged
Technical Analysis
Based on the long term technical chart analysis, it shows that Gas Natural have recently broken the long term uptrend line. Before it broke the long term uptrend line, it went up to test the long term resistance of $12.30, and it failed. Based on the chart above, I believe this stock will resume its upward move to test the uptrend line resistance at the $11.20 level.

Click on the above image to enlarged

Based on the short term chart, it also shows that Gas Natural is heading upward to test the 1st Resistance at $11.10. If it can overcome the 1st resistance, the 2nd resistance will be at the $12.30 level. I believe that the second resistance at $12.30 level will be very hard to be broken as it is not only a multi year long resistance but it is also the level will major sell down will happen to those investor who bought at that level previously.

All short term indicators point to a buy. Both MACD line and histogram show that this stock will continue to move upward, however, the stochastic indicator does show a bit of weaknesses as it near the upper level of the line or the 80% level. 

The recent increasing trade volume is a sign as it shows that this stock upward move is genuine and strong.

Fundamental Analysis:

Based on the above earning projections from CNBC website, it shows that the quarterly earning is not consistently and it fluctuates greatly. I did not go into details and find out the reason behind, however, based on the above projection earnings, this is not the kind of stock that I would invest for the long term.

On strong criteria this stock have is the monthly dividend of $0.05 every month. It comes to around $0.60 a year which is around 5.5% dividend per year if bought at the current price of $10.71.

Based on the above technical and fundamental analysis, I would buy this stock for the short term, however, when it approaches the great resistance at $12.30, I will not hesistate to follow the herd and sell into strength and take good profit.

Good luck.
Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 

Below is the other analysis on this stock:

Gas Natural Inc. (EGAS) has been downgraded to hold by Sabrient Systems and today was its latest monthly ex-dividend date.   As such,  I am recommending we take some profits from our position at the opening bell tomorrow.  There looks to be some upward resistance above the $10.60 mark and therfore RSY recommends to sell 200 shares of EGAS (half of the 400 position) at a limit price of $10.59 (GTC).   We should also note that NGPC provided the portfolio with a dividend of $36.00 from the 200 shares on January 7, 2011.

Wed, Jan 12, 8:32 PM ET, by Ron Rutherford,

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