COG, RRC and many other natty darlings are receiving a lot of takeover hype lately. Any stock that is taken over will jump wildly higher so traders are looking for lottery tickets in this sector. As seen by the COG chart, however, negative divergence is in place and the ticker is more agreeable to shorting than longing. The tricky part is that it is best to not short a stock like this since you may wake up to morning news that the company was taken out, and then you will need to be taken out on a stretcher. Likewise, chasing a stock purely due to takeover possibilities is typically a stupid endeavor (although Keystone will look away as he thinks of his ongoing RIMM trade), and if a takeover does not materialize, the negative divergence will rule and the traders hoping for a big pay day will receive a big kick in the pants. These plays are best avoided now, there are much more attractive plays in the markets as highlighted on this site each day. Nonetheless, it is interesting to chronicle this ongoing drama in the natty space.
For COG chart use search box above for keystone speculator.