If all answers were obvious, our brains would have no use for reason.
Lets start with the charts.
First up is the Triangle chart, a quick and dirty way of assessing technicals. We see a +100 score accompanied by both weekly and monthly bullish triangles. This is enough information to make a nice living off of the stock market. But the explanation underlying that statement is being saved for a future blog, all to it's own. For now, suffice it to say thumbs up; way, way up.
Above is the Blue Wave weekly chart, providing the most conservative view of potential. Here, a Wave 4 advance is shown, targeting a move to $10-15. With CEP trading at $4.57, even if the 90% downtrend is still in effect, the stock has potential to double or triple from current prices.
I'm posting the above daily chart, a time period that you seldom see me post. Why not? Because everyone is looking at the dailies, I like looking from more unique perspectives. But the daily chart does provide an important piece of the puzzle, a stop. Blue Wave will turn bearish on this chart at the level of $3.81. Thus we have a risk:reward perspective. The risk is about $0.50, or about 12%. Earlier it was suggested that a 100%-200% gain was being targeted. So the play here is to risk about 12% to gain between 100%-200%. I'll take that bet.
Let's drill down to the 120 minute CEP chart:
Some added information shows an Elliott Wave 3rd Wave, confirmed by the Elliott Oscillator. All the EO is suggesting is that since it is making new highs along with share prices, that the current rally (Wave 3) is stronger then it's predecessor (Wave 1) as should be the case is if the shown 3rd Wave is being accurately counted. We would expect a non-confirmation to accompany the next bullish wave up (Wave 5), so again, the likelihood is that this isolated upmove is not a terminal wave and will be followed by a weaker advance, sometime into the future. It is those non-confirmation advances that have us looking out for an ABC decline of significance and none can be assumed imminent from the above chart.
Now the bad news.
CEP is a Limited Liability Company and thus it's income/expense items are passed through to owners/shareholders. It also means that it's hefty dividend yield is part income, part return of capital. Not much of a problem for stock held in retirement accounts, but added confusion when it comes time to file income taxes for non-retirement accounts. Personally, I ignore such issues when it comes time to buy something that has a 12% risk against a 100%-200% gain. But to each his or her own.
Fundamentally, the company looks pretty damn good as long as natural gas continues to rise, or even holds firm, or even eases somewhat from current levels. If natural gas takes the pipe, i.e. a significant haircut from current pricing, the payout may be threatened.
CEP was a $50 stock in August of 2007. They arguably have a better array of properties and natural gas reserves both proven and unproven today. Like other MLP's (Master Limited Partnerships) their shares price to pay-outs and are aligned with junk bond status securities which make them somewhat sensitive to the direction of interest rates.
But then there is this:
"These reserves provide long-lived production, low risk, low-cost drilling opportunities and a high percentage of proved developed reserves."
The cross-bar. Zetterberg's third period shot hit the cross-bar, bounced to the ice and skipped harmlessly away from the Penguin goal............and we knew, it was over.
The agony of a game of inches, where reason and right, collide against cold hard steel, then dance inexplicably into the abyss.