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BULLETIN>>

Breakout! Manas Petroleum
Share Price Shatters Pre-crash Resistance

Technical take: A picture is worth a thousand words and this one is bullish.

A picture or stock chart is worth a thousand words and the Manas Petroleum (MNAP: $0.56) chart looks to be shouting loud and clear that some very bullish events are in the works. After breaking through its downtrend last February I have been chronicling each and every bullish development. I warned readers that powerful long term technical buy signals had been triggered in stochastics, on balance volume, relative strength and moving average during the past month. The latest break out is through what I think is a very significant $0.50 resistance level (see chart). Critically this breakout has been confirmed by RSI, OBV and Stochastics. According to the chart below the next resistance level is not until almost 50% higher or $0.75. I think I have to give Edwards & McGee the Authors of the 1940s classic Technical Analysis of Stock Trends credit for the observation that for a break out to be really bullish it should be on rising volume. Over many years of observation this has proved to be true. Manas latest move started a few days ago on only 46,000 shares, the next day it traded twice that amount as its share price rose and its volume kept building: rising to 382,000 shares yesterday, and then, as it broke through what was a major resistance level today it traded more than 700,000 shares. To repeat: I think Manas shares are in a classic technical bull market- the major kind I have witnessed and profited from and in my early years, read about in Edwards & McGee.

Possible drivers of this bull move: With Manas there is more than one.

As Santos embarks on drilling what could be some very significant discoveries at its Central Asian joint venture with MNAP, Manas says its focus has been to find partners for its Albania light oil play; specifically some very high quality drill ready exploration prospects, some which were originally developed by Shell and Occidental Petroleum. The chart is confirming what the company has been saying, it is out of the woods financially, drilling of some great light oil prospects and it is in advanced stages of negotiating the farm out of its (what I consider fantastic) Albanian light oil play. To put "fantastic" in perspective the last exploration play I put in the same league was InterOil’s Papua New Guinea play and they just drilled the largest producing gas well in the history of the oil industry.

To watch for: Farm out or drilling in Central Asia

Currently I think all eyes are on the Occidental’s Spiragu light oil discovery in Albania which Manas now has possession of. I think the question is more likely not “if” but “when” will they farm out the appraisal drilling of the OXY/Spiragu discovery. I have to emphasize I don’t know what is moving Manas Petroleum’s shares - whether it is drilling in Kyrgyz Republic or the “possible” approach of a deal on Albania. I think the bottom line at this juncture is that its shares still appear very undervalued even after the recent gains.

I think it’s important to keep in mind that at a $2 per barrel estimated cost of production, and with resources that now exceed, according to independent studies (Shell/Gustavson), more than 3 billion barrels, MNAP must be on every oil major’s radar screen. Because the Spiragu is around 15 miles east of Europe’s largest onshore oil field (1 billion barrels) this subsequent discovery in the neighborhood, in hind sight, appears a given. The real question as to size will be answered by the appraisal drilling of the Spiragu and the drilling of newly discovered prospects nearby. My guess is Manas will seek a smaller operator or independent they can easily deal with rather than risk partnering with an 800 pound gorilla like Shell or ExxonMobil. Time will tell. One thing is apparent, according to its share price action Manas looks like it’s about to have a great year.