Opportunity in the trashed gassy producers

It has been difficult not to notice the bearish stampede out of the natural gas producers, the uranium miners and the gold miners. The perception among investors was that if the related commodity prices in natural gas, uranium and bullion were to continue to fall, there was no point owning the related producers.

The price of natural gas has been in free-fall for months triggering a bearish stampede out of the natural gas producers. Some producers have had their prices driven down to historical negative price deviations from their long term moving averages – see the example list with the name, symbol and the per cent negative distance below the 40-week moving average – the bigger the number the more likely a recovery

Advantage Oil & Gas Ltd. AAV -27.33
Birchcliff Energy Ltd. BIR -45.78
Celtic Exploration Ltd CLT -34.79
Delphi Energy Corp. DEE -34.52
Fairborne Energy Ltd FEL -33.79
Progress Energy Resources PRQ -16.44
Tourmaline Oil Corp TOU -20.93

These oversold gassy producers will eventually ignore the current reality and anticipate the eventual return to higher gas prices. I do recall the many of todays mid cap gold producers trading for pennies in 2001.