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Bering (BERX) Bearing Down

Making money in small stocks is all about buying dips and selling rips. That's why - in any sort of reasonable market conditions for small stocks, I like to have a list handy. Here's what's on my list- about 3 or 4 small stocks I like at any point in time.

Style is an issue here as well. If you only like to buy stocks that are hot and moving, this style will not work for you. However, if you like a lower risk entry point with perhaps a little longer wait time, buying the dips is a good way to go.

Bering Exploration (BERX) is one of the companies I'm sticking with for the next 9 months to 1 year, so I'm going to keep publishing content on this idea. Right now, with oil prices coming down a bit on the perception emerging market demand is slowing, many of the high flying low priced stocks in that sector have pulled back.

I believe the recent quieter activity is more seasonal than symptomatic of lessening demand. Taken over the longer term, demand for resources is not slowing. The emerging markets demographics are simply too strong for any signficant long term decrease in demand.

There's only one way to keep a lid on energy prices- increase the supply, and increase within our borders. Hence the very high level activity amongst junior oil and gas companies. And, hence my decision to stick with BERX- a company that dished some really strong news today. 

Texas Signs Off

BERX has properties in the Eagleford Shale it will be developing. Located in Southeast Texas between Austin and San Antonio, the Eagleford Shale formation has reached nearly gold rush proportions of big oil and gas developers.

New horizontal drilling techniques are fueling growth in the area. North Dakota's Bakken Shale formation is now nearly fully developed and is estimated to have 4.7 billion barrels of recoverable oil.

The Eagleford Shale is just getting started, and it's estimated to have 9 billion barrels of recoverable oil- nearly double the Bakken Shale.

Back in late March BERX announced it was nearly ready to commence exploratory drilling on its 1200 acres where potential gross reserves of 3 million barrels are possible at 120 different potential well sites.

I learned today that you have to be a licensed operator by the State of Texas to begin drilling, and like a 16 year old getting a driver's license, BERX just got licensed today by the state to commence drilling operations.

Going back to my initial point about trading style- if you like to accumulate when a stock is cheap so you can " sell the rips" down the road, BERX is looking pretty tasty right now.

As you can see from the chart, this stock made a rather meteoric run in the March/April time frame, motoring from about $.80 to over $1.60 in about 5 weeks. Not a bad return if you can trade it.

Now, the stock has quieted down and has been trading with a very slight upside bias over the last week.

To me, this is a heaven sent entry point if you like accumulating them when they are very cheap, and selling into strength. Buy the dips, sell the rips.

And, there will be at least two more rips in this stock in 2011- that is my prediction. This stock will likely go back to it's April high later this year.

Here's the complete text of today's news for your review:

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