Twin Butte produces 17,400 barrels a day, 90% of which is weighted to Oil. The NAV of the Company is around the $3/share level. The embedded image in this post shows 2 Gartley patterns.
The first in blue color culminated at point D in late 2012. Technically, D should have exceeded B, but it was so close that I am giving it the benefit of the doubt. From this D point, price fell as expected to where we find ourselves now – below the NAV of the company.
The second pattern I hava shown in red color. Point D will culminate such that the distance XA is related to AD by 0.618 or 0.786. The 0.618 relationship says that D will be at the $2.04 level. The 0.786 relation says that D should be at $1.82.
So, here we sit – a producer trading below NAV.Tempting isn’t it?
Buy it here and you risk that it may dip to $1.82. If for whatever reason it falls lower that $1.82, the pattern is invalid and Twin Butte has bigger issues.