China Natural Gas (CHNG) Continues To Climb

• Ian Wyatt
• On 5:00 pm EDT, Wednesday October 14, 2009

Time to break out your Dow 10K hats! The Dow dropped below 10,000 on October 7th, 2008. And it just made it back to that significant level today, 53 weeks later.

Don't expect the Dow to advance too much more from here though, at least in the short-term. I expect 10,000 will act as psychological resistance for a while. But longer-term  I'm expecting more upside this year and think the Dow has a shot at 10,500.

And that means there is still opportunity in the stock market: especially among small cap stocks.

As we've seen, quality small caps often make dramatic moves higher. And that's because, to quote Tom Petty, "the future is wide open" for these companies.

Take China Natural Gas (NasdaqGM:CHNG - News) for instance. On October 2, it was an $11 stock. Today, it's pushing $15, up 36% just this month. I first mentioned China Natural Gas here in SmallCapInvestor Daily on October 9, even though my advisory service members have been in this stock since June at $6.14 a share (membership indeed has its privileges).

China Natural Gas has been around for a few years, trading as high as $23 a share at the end of 2007. But it was the recent positive response by investors to its expansion plans that has the stock moving now.

On September 3, 2009, China Natural Gas announced it planned to raise $50 million by selling its own stock at $8.75 a share. That day it closed at $11.75. You might think dilution and the low offering price were bad news. But the money is being put to good use:

The net proceeds from the offering will be used for the construction of the Company's liquefied natural gas (LNG) facility, the acquisition of eight CNG (compressed natural gas) fueling stations, the purchase of eight CNG trucks to transport CNG, and the establishment of a joint venture company with China National Petroleum Corporation Kunlun Natural Gas Co., Ltd., as well as for general working capital purposes.

In other words, the future truly is wide open for China Natural Gas and investors are proving they can see that future. And they're buying.

India Globalization Capital (AMEX:IGC - News) is another stock for which investors see a bright future. India Globalization is a contractor in India. And investors seem to be saying that the pressing need for infrastructure in India will be addressed by the new Indian leadership. The thawing of the credit markets will make India Globalization a big player in that endeavor.

India Globalization is up 23% from its close of $1.86 on September 28 when I first wrote about it.

Chinese fertilizer company China Agritech (OTC BB:CAGC.OB - News) made a huge move on Friday, October 9. With 2 billion people in China, shrinking amounts of arable land, and a big pollution problem, it's easy to imagine a wide open future for this Chinese organic fertilizer company.

You may also recall that I have a competitor to China Agritech in the SmallCapInvestor PRO portfolio. And that stock is up 8% today, as compared to China Agritech's 4% move.

All told SmallCapInvestor PRO readers are up 75%. You can find out more about this stock and my new "crop" of small cap winners HERE.

Ian Wyatt is the Chief Investment Strategist of SmallCapInvestor PRO (http://pro.smallcapinvestor.com) and author of the book, "The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks." You can learn more about his book at http://www.smallcapbook.com.

Buzz up!