Energy Sector on the Radar — Can NOG Cross $45 in the Short-Term?

The global markets are still bullish, and today, Trading.Biz analyst Rahul Nambiampurath has identified a dark horse for traders: Northern Oil and Gas (NOG). Even though NOG has shown zero momentum year-to-date, mid-2024 can mark its journey to over 20% gains.

“Northern Oil and Gas have positioned itself for growth led by high-quality land holdings in hydrocarbon-rich locales,” mentions Rahul.

WHY MIGHT NOG START SHOWING BULLISH SIGNS?

Here is a quick stat that showcases anything but bullishness:

NOG’s Q1 2024 revenue was $396.3 million — down 32% year-on-year. Still, Rahul managed to identify several reasons for the possible investor optimism:

• Record Production: According to the Q1 2024 report, achieving 119,436 Boe per day demonstrates operational efficiency and capacity for growth.
• EPS Exceeded Expectations: Earnings per share of $1.28 surpassing projections indicate strong profitability.
• Strategic Land Holdings: Over 300,000 acres in top-tier regions provide long-term value.
• Non-Operating Model: Collaborations with 100+ third-party operators reduce risk and enhance operational flexibility.

NOG has demonstrated exceptional operational efficiency with record production figures and strong profitability. The strategic land holdings in hydrocarbon-rich regions ensure long-term value, while the non-operating model minimizes operational risks and maximizes flexibility through partnerships.

NOG’S TECHNICAL ANALYSIS

NOG’s daily chart reveals several interesting formations, including the ascending wedge pattern. Even though the ascending wedge is considered bearish, a higher low formation might just be on the cards for NOG. This might mean a trend reversal, provided the price action stays above the lower trendline.

Notably, a surge up to $41, led by strong investor sentiments, can propel NOG as high as $43.77, a key resistance level. After that, NOG might encounter resistance at $45.77 and then at $49.

Several analysts align with Rahul’s analysis of NOG. Noah Hungness from Bank of America is one of them. Hungness sees massive growth potential for NOG, led by large future mergers and acquisitions (M&A). He has given the stock a buy rating with a price target of $48, suggesting a potential 29% upside.

Additionally, the stock has a strong buy consensus with an average target price of $49.50, indicating a potential upside of 33%.