Time to send it back homeAs the market made all time highs we started to see this stock break down. If and when the market makes a meaningful pull back FLNG should see as much as 50% pullback from all time highs.
FLNG trade ideas
Medium term price target for FLNGFLNG is part of my core dividend portfolio which is a recession based anchor that keeps my net worth safe while aiming to outperform short term treasuries. I have been adding to the position every time FLNG hits 30$. With fib extension I believe 44$ is in the cards by the middle of next year. FLNG carries a massive dividend and is a natural gas play that does not care about the price of LNG. This transport company uses debt well, and has grown exponentially since relocating to Bermuda with all of the tax benefits that arise. I am looking at this and another indirectly exposed stock as small cap growth/dividend mixture companies to help carry value through the impending and likely recession.
Bullish on FLNGFLNG has done several bullish things recently:
- Broke it's blue downward trendline(s).
- Broke overhead resistance and retested it.
- Broke through the daily cloud and retested it.
- Made 2 higher lows, thus creating an upward trendline with 3x touch.
- Moved above the 50MA on the daily chart and found support above (light blue line).
So very simple, this is a buy form a TA point of view.
Tick Tock for FLNGLooks like the bet on margins for natural gas related activities are on the blink as gas futures have reset to below pre-pandemic levels.
Having one of my best trades of the past two years (without options) in the books, I'm taking profit and going on the options train.
Looking for a strategy that places the max loss above 38. and break even at around 27. I assume that this may take 12 months to play out because:
Europe may have proven to the world that they can handle the new gas flows away from Russia.
This means that pressures on emerging markets to buy gas at lower prices are going to ease considerably in the next 12 months.
I'm also placing a 6-to-9-month buffer to allow the Wyckoff distribution pattern to play out. The options strategy I'll pick will put this info into consideration in addition to the risk that the price remains elevated.
I'll update the strategy below as soon as I work out the numbers, (premiums, decay rates, target profits, expiry dates etc). This is just the first step to identifying a potential trade options idea so bear with me. If you have recommendations for strategies, comment below. If possible, please highlight the numbers.
Norwegian pennystock Flex LNG (Natural gas transportation)Table of contents:
§ 1 About FLNG
§ 2 The market
§ 3 Why I am bullish
§ 4 The risks
§ 1
Flex LNG(FLNG) is a Norwegian company.
They specialize in transporting liquid natural gas around the world for heat, cooking etc.
They also create ships themselves, specially created within the CE regulations to ensure safe transport, as natural gas is highly flammable and explosive (who would have figured that one out...)
Now, FLNG has done something that might be incredibly smart or it might be incredibly stupid depending on which way things goes:
Most companies transporting gas and oil get a fixed rate on the transport, however FLNG has made it so they get paid based on the spot price of natural gas (futures are called NG1! if you want to see the price)
This means if the price of natural gas goes up, so does their revenues, which also creates an interesting scenario for us as I will explain in more details in § 3.
§ 2
FLNG's market is mostly based in China and India (~2 billion people) which in latest years have used a lot of coal for heating, the problem with burning coal is that it's very harmful to the environment, it releases a lot of CO2 and last but not least it releases microscopic particles in the air increasing cases of astma and COPD (Chronic Obstructing Pulmonary Disease) which I don't have to tell you - is reall bad.
Now both China and India needs to move over to a more environmental friendly source of energy and heat, this is where natural gas comes in.
When you burn natural gas, you only get CO2 and water as a biproduct, which is still bad for global warming, but does not increase cases of COPD or astma.
§ 3
I am bullish when it comes to FLNG as I believe it will be ranging a lot based on time of year, as we can see when it comes to natural gas spot prices, this can make it a lot easier to predict price movements, as price has historically been highest in the winter (because it's cold and people need more heating, again, who would have figured...), and lower in the summer as very few people need heat in the summer.
I also think that because the market is so huge with at least 2 billion people I think there is a LOT of room for expansion.
§ 4
Although I believe this is an up and coming industry that will be huge the coming years, there is no guarantee that FLNG will be the leaders in the market, but seeing as Norway historically have been one of the leading ship builders and also leading within oil technology I strongly believe flex have a high potential. However, if it does not reach a 50-100% increase within February, it will likely not happen this year as spot prices will be on their way down again.
Another risk is market turbulence which might hurt FLNGs price.
To end it off with a little bit of my techincal analysis:
Price bounced from the 80NOK mark (~$10) where it has not been since it's true pennystock days where liquidity was scarce. Price was trending downwards after the winter just like NG prices have too. I believe the 80NOK level will hold because a lot of bigger institutions bought in at 120NOK and I believe they will either look to average down around the 80NOK mark to get their average to 100NOK to lower their overall downside.
And as we are smarter than the institutions (not really) I came up with an idea on how to spot more accurately when price is likely to explode (thank me later):
Look at weather forcast for the most populated areas in China and India, when temperatures start dropping it's probably time to buy either FLEX or NG futures.
Thank you all for reading and have a great rest of your day.
Flex LNG (FLNG) Long PositionI'll just call this a Hail Mary since I don't know what this would fall under as its still in consolidation after the previous cup with handle pattern.
But last Friday's pocket pivot volume was about 450% above average even as it squatted. The rally seems to have been a marked attempt to get the price above the 50 MA last Friday (which it held) and opened today above the previous close and was looking like a wick play at the start of the day.
FLEX potential breakout from a stage 2 baseFLEX has shown good relative strength recently and looks like it's been under accumulation since April (see the yellow dots). Price filled the gap 2 days ago on good volume and yesterday saw a bullish looking inside day with a pocket pivot. If price can hold over $30.47 we could see a decent move to new ATHs
FLEX LNG short term position According to with last tensions between Rus and Ukraine US gas supply will be provided by sea passage.
Flex LNG Ltd., through its subsidiaries, engages in the seaborne transportation of liquefied natural gas (LNG) worldwide. As of March 15, 2021, it owned and operated nine M-type electronically controlled gas injection LNG carriers; and three generation X dual fuel LNG carriers. It also provides chartering and management services.
Position till date of dividends or level 24.50$
FLNG looks to set up for another leg up.So looking at FLNG's behaviour lately we see a W-formation was formed around the 52-55 area, before breaking through resistance from there (green line).
After this over extended W-formation a retrace was to be expected to at least the 0.318 fib, which is what happened.
Whilst testing the 0.318 fib/05 fib (60-62.50), another W-formation seems to have formed (see orange line).
Now FLNG has broken above horizontal resistance and a long term downward trendline and seems to be finding support on those previous resistances.
In short, everything seems like a perfect setup for another leg up.
My short term target is around NOK 77-80,- Which is the next resistance on the weekly chart and the top of the ichimoku cloud.
