The 12 month graph is below with rationale attached as to some of the changes in patterns.
AUT until April 2010 has operated on very low volumes and been very tightly held. After Hilcorp took over they have set a crracking pace with multiple successful wells back to back at shorter and shorter times.
In addition the results from each well have basically got better and beetter, culminating in Rancho and Morgan the two best wells in the entire Eagleford Shale to date, then Turnbulls affirming the high quality liquids in the north west longhorn acerage which makes up 65% of the play for AUT and where they hold a 25% interest.
Applying some sort of rational and reasoning its easy to see why the trend changed.
Then at point D, the overall market took a major tumble on fears of a US tumble and possible GFC2. Even during that time AUT showed its strength.
Only dropping around 9%.
Speculation began about the need for a CR which eventuated at point E, closely followed by a 10c discounted SPP @ 75c.
Despite all this AUt has held its own. Now showing clear signs of sp growth returning. Undoubtably some recipients of Cr or SPP shares will chose to sell in the shorter term and there will be added selling pressure.
However there is no evidence to suggest the current sp is over valued.
When comparred to all the recent M & A activity in the Eagleford from the last 4 months AUT is significantly under valued at 84c.
On its charts it has had a long period of consolidation with massive volumes establishing a signiificant new resistance level around the 78-84c level.
Using a trendline that takes into account reasons rather then nothing but a simple one line with no rational, its actually under valued and sitting below the trendline.
AUT is up for the close, up for the last part of the week, up for the mont, up for the 3 months, up for the 6 months.
The alternative argument being put forward carries no evidence to suggest its true or warrented. The sellers are not in control of the day, the 5 days, the month, the 3 months, the 6 months or the 12 months. Sure they have been active as one would expect on the back of both a CR and SPP. The buyyers still have 150% more then the sellers.
The week following the issue of the new shares will of course have more activity. But for those sitting on the sidelines hoping to pick up cheap shares, theres also the risk of the reserves upgrade which is due in July. My thoughts are they will wait for IP's on the Ipenema acerage, but if its scheduled in and booked inthey could doi it hust using the existing wells.
hartleys project a 300% upgrade from a figure that was calaculated on a 7% recovery basis to a figure of 22% recovery.
Similarly Hartleys says to expect regualr upgrades in thier price on the back of the amazing results coming out from hilcorp.
Already we have seen one more spectacular flow from Turnbull 2 since hartleys and Euroz released thier figures. Next week we are likely to get IP's on T3 and soon after Kowalick plus the Reserves upgrade.
I personally dont buy any of this doom and gloom being cast upon this stock. I think its good to question people but provide evidence and reasons, and whilst i find this debate frustrating it is healthy.
I have made a lot of money on the share market, I have never seen a stock with better immediate potential then AUT right now , but given that there are still risks associated with the drilling, fraccing, political, environemental, overall market and energy prices, so seek expert advice and DYOR.
I just hope the doom and gloom Nun is presenting doesnt cost people a lot of money, similarly the optimism i presnt. They are both only opinions. However i do feel my case is supproted by significantly more reasons and evidence. In my opinion the counter argument is reliant on one graph and one trendline, its not taking anything else into consideration. Despite counter arguing for over three pages we are yet to see any evidence from the doom and gllom side to see why he thinks his case is correct other then a few lines with no reasoning or evidence.
I have however sensed a significant softening in his stance, which has possibly been brought about by the three days of renewed buying pressure being applied to AUT.
Make your own decisions, seek expert advice, its your money. AUT is a bloody great stock in an incredible growth pahse, with a brilliant operator, in the hottest shale play in the world right now, with the best two wells in that play, possibly the best 4 if Turnbulls where allowed to flow unrestricted. Theres not much wrong with it when evidence and reasons are used.
I take absolutely no objection to Nun presenting his graphs for a completely different timeframe, but if he and others are going to come in here and make amazing claims such as AUt is about to fall out of the sky to 40c like they did a few days ago it needs to be backed up by evidence, not a simple trend line that has no consideration for the development that has occurred.
So far it has not had any evidence and is completely and catogorically misleading unfounded and untrue. Reckless in fact.