Trading the Energy Stocks

I'm watching XOM closely for a quick swoon which I think comes. I am short the XLE in moderate size. I am still long APL, LINE, MWE amd EROC with nice gains. I love APL here for a quick pop. These are MLPs that are pipeline oriented and wwaayy undervalued on so many metrics. I've been accumulating the following based on substantial fundamental research and daily chart relative strength versus the XLE and SPX....... CFW, EGY, VQ, CRED 1. These are peak oil plays which, IMO have the potential of 10x returns plus. The assumption is energy prices begin to recover AFTER about 12 months. 2. Most have insider buying and all look like they have disaster priced in but should survive unless NG and CL stays at very low levels for longer than a year. Most of the above have extensive hedges in place and balance sheets capable of weather stormy weather. 3. The most speculative is also my favorite.....CFW. CFW is the riskiest but could really be a huge win if oil prices again move above 100 in the two to three years ahead. 4. In addition to the above I like DO, NE, NOV and CHK but I'm not playing them yet. I'm just watching the charts.

I think a monthly chart of XOM will soon look like that of CFW, VQ, & CRED. The oil play is over.

I'm watching XOM closely for a quick swoon which I think comes. I am short the XLE in moderate size. I am still long APL, LINE, MWE amd EROC with nice gains. I love APL here for a quick pop. These are MLPs that are pipeline oriented and wwaayy undervalued on so many metrics.

I've been accumulating the following based on substantial fundamental research and daily chart relative strength versus the XLE and SPX.......

CFW, EGY, VQ, CRED

1. These are peak oil plays which, IMO have the potential of 10x returns plus. The assumption is energy prices begin to recover AFTER about 12 months.

2. Most have insider buying and all look like they have disaster priced in but should survive unless NG and CL stays at very low levels for longer than a year. Most of the above have extensive hedges in place and balance sheets capable of weather stormy weather.

3. The most speculative is also my favorite.....CFW. CFW is the riskiest but could really be a huge win if oil prices again move above 100 in the two to three years ahead.

4. In addition to the above I like DO, NE, NOV and CHK but I'm not playing them yet. I'm just watching the charts.

Cirrus -- are you still in the peak oil camp? you think it roars back to $100 a barrel this year like t boone pickens?

ed rader

Peak oil is a fact. I'm talking about peak CL not NG or NGLs. Peak NG is years behind peak CL. CL is priced at the margin. We are in something close to a depression and yet CL is still trading around 40. Before the bull market in stocks started (2003) CL traded at 25. It's low was 17 in 2001. What was the SPX low? CL is showing nice relative strength versus other assets over a 10 to 15 year period (secular trend). Could it go lower?...yes and it will because NG is about to drag it down. Don't miss the big picutre...or don't miss the forest for the trees. We are in the worst economic slump in the past 75 years and it's global and yet CL refuses to plummet. When you study the fundamentals (depleition rates, cost of new production, GLOBAL supply, GLOBAL demand, new discoveries by decade and new production) you will see peak CL as a fact. It's been PROVEN in North America and now globally. The savior will be NG for a while. NG will be used in transportation widely within a decade IMO. Most here just look at ST charts though (I do, too). I do like to understand the story behind the charts from a completely objective standpoint. CL spiked to help cause this slump. Be patient (a year or so) and you will see CL bottom and move back up again.

Edited by Cirrus, 02 February 2009 - 12:26 PM.