Beautiful Bottoming Pattern, And the Monthly Chart Looks Sweet

2020年4月29日

PROs:

Trading at 60% below its fair value
Earnings are forecast to grow 70% per year
250% return over the past year
NAT is forecast to become profitable over the next 3 years
NAT’s short term assets exceed its short term liabilities
NAT has sufficient cash runway for more than 3 years
NAT’s dividends in 3 years are forecast to be covered by earnings
Analysts recommend a ‘Hold’ rating (average)
NAT pays a dividend

CONs:

Highly volatile share price over the past 3 months
NAT is unprofitable
NAT’s revenue is expected to decline over the next 3 years according to analysts
Losses have increased over the past 5 years at a rate of -45% per year
NAT has a negative return on Equity
NAT’s short term assets do not cover its long term liabilities
NAT has a high debt to equity ratio
NAT’s debt to equity ratio has increased considerably over the past 5 years
NAT’s dividends have fallen over the past decade and are considered low

Report:

A very nice falling wedge pattern (blue) formed over the past decade or so. With a Cup ‘n’ Handle pattern in progress dating back to early 2016. The fundamental picture is ok, but nothing to shout about. Recent news articles have suggested a ‘glut easing’ for Oil is underway, however, if history is anything to go by, glut easing is usually short-lived.

Bottomcatcher’s Opinion: Definitely one for the watchlist! Despite yesterday's herculean performance, caution and monitoring are required at this stage. Towards the end of this week and especially next week will be telling, as Oil prices are trying to recover from their most recent declines. If prices can stay inside the Arc and above sloping trendline resistance (blue top line of falling wedge pattern) at (1) on the weekly time frame, we should consider taking a long position to hold for the medium to long term.