Blugrass Energy Inc (BLUG)

Blugrass Energy Inc (BLUG) is now doing business as Rio Grande Petroleum Inc. - but it's still an oil & gas exploration and development energy company drilling in the Permian Basin of West Texas.

In short, GSTP surged 28% yesterday on huge volume - 2.4 million shares traded - and in the course of that move, the stock took out the 50 mda for the first time in 4 months.

So if you took the Preacher at his word and made a killing on GSTP yesterday, congratulations!

Now let's take a quick look at BLUG's technicals, to see if we can divine where it'll head today...

After testing the $0.02 level no less than 14 times this year, the stock has rallied higher every time!

Slow STO just made a cross to the upside yesterday, at +1.11 reading.

RSI is pointing up to 47.15.

BLUG Inks a Major Deal and its Stock Soars!

BLUG shocked traders on Feb. 23 when it announced the company had acquired a major oil and gas lease, covering 4,807 acres located in the resource-rich Permian Basin in Crockett County, Texas.

The milestone deal for BLUG includes an option to work another 9,850 acres site, which is in the same geological trend that other oil and natural gas giants are working, including: Chevron, Occidental Petroleum, Anadarko Petroleum and Chesapeake.

You see, the Permian Basin contains 500 BCF (billion cubic feet) of natural gas (NG) reserves, according to seismic data received by BLUG from independent analysts. (Read more)

So, at a current selling price of $4 per thousand cubic feet of NG, Permian Basin's reserves are worth approximately $2 Billion.

And so, when the news of the deal was released...BLUG soared 93% on more than 14 times the stock's 30-day MA volume of 7.1 million shares.

The rally then extended into the following day, with BLUG providing traders with an additional 32% gain.

And now with energy prices embarking on another bull tear...

Volume, Volatility & Price Trigger this Timely BLUG Alert

After averaging 170,074 shares traded on a 30-day MA basis on Feb. 14, the 30-day MA volume inBLUG has zoomed to 1.2 million shares, today, up an eye-popping 605%.

And BLUG's average daily volatility of 28.8% may have a lot to do with the tremendous liquidity in the stock.