GeoGlobal Resources (GGR)

Company

"GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada, is a US publicly traded oil and gas company, which through its subsidiaries is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. Since inception, the Company’s efforts have been devoted to the pursuit of Production Sharing Contracts with the Government of India. Currently, the Company is focused on the development of high potential exploration targets in the Krishna Godavari basin, the Cambay basin, and the Deccan Syneclise basin." (company website)

Buy

5-Oct-06. GGR took a steep dive in 2006, bottoming in August (see sidebar). The downtrend appears to be broken, and the 50-day moving average has turned up. Trading has just pulled back to the average and the lower Bollinger band. MarketEdge has GGR a "strong buy" that is oversold and at a good entry point. We'll see. Buying at an oversold point like this means that some of the indicators are pointing down that I would prefer to see pointing up, which has burned me before. Besides that, GGR is traded on the AMEX and is an energy stock, neither of which has generally worked out profitably for me. Yikes, why did I do this?

• Price momentum (PPO) — picked up sharply, but slowing as a result of pullback
• Trend (ADX) — weakened during pullback
• Money flow (CMF) — about neutral
• Relative strength (RSI) — stronger since reporting earnings, but about neutral now
• Volume — more or less stable since earnings

Sell

17-Oct-06. After peaking yesterday at $7.50, GGR was pummeled along with almost every other stock in today's sour opening. It was enough to trigger the activation price of my trailing stop ($0.55), that had risen to $6.95. This is the first case of my new risk management strategy working, as it should, to protect my gains. I think I like it!

The GGR chart still looks very strong to me. I expect a pullback, after which I can jump back in again for another ride up. Applying the Fibonacci tool to the chart (right) leads me to believe that I should be able to buy back in somewhere around $6.60. We'll see.