Editorial Contributor
Buy San Leon Energy (SLE) @ 6.9p Recommendation Summary: As many in the market will have noted in the wake of the announcement in February that hedge fund legend George Soros had lightened the load as far as his gold holdings were concerned, it usually makes little sense to trade against the legendary investor. However, those who copied Soros in buying into the Poland focused shale gas group San Leon Energy would have to concede that at the very least it has been a very rough ride on the share price front in the last couple of years with a large range between 5p and 40p being seen — roller coaster probably underplays the reality of what has happened here. With the stock now bombed out and trading at the floor of the aforementioned range, we are potentially looking at a possible bargain hunting opportunity.
CHART - SAN LEON ENERGY
78 | www.financial-spread-betting.com | May 2013
Clearly, after an extended downtrend in a stock or market — with the one here in San Leon’s case lasting from the beginning of 2011 to the end of April 2013 — something transformational is needed to change both the trend and sentiment towards the company. This transformational issue appears to have come on tap with the news of a natural gas and light oil recovery from the Czasław-1 well in San Leon’s Nowa Sol Concession in Poland announced on April 19th. The effect on the price action of the shares was a one day jump of 30%, enough to cement a sustained rebound off the floor of a falling 2012 price channel at 4.6p, the bear trap rebound back above the initial April 5.5p intraday low and a bounce off an October RSI support line at the very oversold 25 level. The implication is that while the 5.5p zone is held on a weekly close basis, we should be looking at San Leon at least hitting the post November resistance zone at 9p plus — and probably much more on a 2-3 month timeframe.