Traders Aren’t Quite So Sure About North American Oil & Gas Corp (OTCBB:NAMG)

Yesterday’s session didn’t go particularly well for North American Oil & Gas Corp (OTCBB:NAMG). The ticker opened at $1.545, went up and down for a few minutes and surged to an intraday high of $1.60 about half an hour after trading began. Unfortunately for the people who were jumping up and down with excitement, however, it quickly tumbled back down. NAMG really struggled during the late hours of the session and after hitting a low of just $1.22, it closed the day at $1.31 which is around 11% below Wednesday’s value.

More than 1.2 million shares changed hands in the process and experienced investors know that increased trading volumes like this could result both in surges towards the higher end of the charts, as well as drops similar to the one displayed by NAMG yesterday. The next logical question is: “Why are investors paying so much attention to what is basically just another oil and gas small cap venture?”.

If you have been reading through our previous articles, you know the answer. In case you haven’t, we should explain that the reason for all the commotion is a huge awareness campaign for the stock that started around a couple of months ago.

At first, it was the landing pages and the emails that spread the word around and for the last couple of days, a paper mailer brochure has also been received by traders throughout the country, which should explain the heavy volumes witnessed since Tuesday. The budget presents itself as something of a mystery. Some of the pump websites disclose a $1.3 million compensation, others tells us that the total amount of money being paid for the pump is $1.7 million. Some of the emails’ fine print contains a figure in excess of $2.1 million while, according to the rumors, the paper mailer states a total budget of $2.4 million.

Whatever the cost of the campaign, the appearance of colorful brochures in investors’ mailboxes really gave the trading volumes a push over the last couple of days. While we have been witnessing some increased interest since July, the number of shares changing hands on Tuesday and on Wednesday in particular smashed the all-time records. A reason for the huge amount of attention being paid to the ticker might be the fact that the person who took the time to write the optimistic projections and the somewhat overstretched price targets is Mr. Tobin Smith, who was working as a business analyst for Fox until a couple of months ago.

This gives the pump a grain of credibility… until, that is, you take the time to do a little bit of research and find that he was actually fired from the media giant due to the fact that he received some money to tout another penny stock with dubious long-term potential – Petrosonic Energy Inc (OTCMKTS:PSON). The pump for PSON was pretty similar to the one being carried out for NAMG at the moment – there were landing pages, a colorful brochure distributed over the snail mail as well as the participation of a number of newsletters. The budget back then amounted to $3 million which made it quite expensive, but as you can see, that didn’t stop PSON from burning a massive hole in the pockets of quite a lot of investors.

Petrosonic was by no means Mr. Smith’s first promotional disaster. Previous dodgy efforts include Western Graphite Inc (OTCBB:WSGP) and Brazil Minerals Inc (OTCBB:BMIX) and, as you can see from the charts on the right, the effects of the increased awareness proved to be far from impressive.

Speaking of increased awareness, some traders are probably still yet to receive the paper mailer brochures about NAMG and you should also keep in mind that the activity through the email is still going strong. The possibility of more people (who have done little or no research) willing to jump in is there, however, it doesn’t guarantee that the ticker will recover. That’s why, playing the pump should only be considered in case you are ready to accept the losses.