Small Cap Energy Shorts

Discussion in 'Stock picks and trading strategies' started by Horace Kent, Aug 17, 2009.

  1. Horace Kent

    Horace Kent Member weekly contest winner

    Some of these names have absolutely exploded in the past month.

    I would say a stop at friday's highs on these is all I would be willing to test on these in particular for the time being. But, the targets look to be around 3X the risk, if not more on a couple.

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  2. Technical Alchemist

    Technical Alchemist forum leader won penny contest 13x won weekly contest 12x

    Read my mind Horace (hint: note my weekly challenge pick).

    By the way, some of these are technically mid-caps. Just busting your balls.
     
  3. Horace Kent

    Horace Kent Member weekly contest winner

    Yeah, Some get around the $2bln market cap range.

    I'm really getting on this deflation meme. It seems too late in the game for that. But, I wouldn't know.

    These stocks could be at yearly highs here. Wait for the rally. Don't chase these. You'll have plenty of opportunity to sell.

    Too bad about that open in BEXP - it should test that gap - that'll put you around 10%+
     
  4. rkahn

    rkahn Member weekly contest winner

    Horace -

    Are the predictions / ideas based simply on chart analysis or fundamental as well? If fundamental, do you mind elaborating a bit?
     
  5. Horace Kent

    Horace Kent Member weekly contest winner

    If you check out the economic issues thread you'll see a discussion about deflation that I started.

    I am convinced the fed still has work to do on the deflation front. I'm trying my best to disprove that. One glimmer of hope I have is the PPIP. But, so far, its been kinda clumsy.

    So.....if I believe deflation fears will shift to the front burner, which I do. My belief is small-cap levered/high beta oil names will probably face a buyers strike due to their weak fundamental position if deflation fears rise.

    I'm basically calling for dollar rally. That would hurt the commodity sector. You could short gold stocks and probably do better. I chose these in particular because of the massive run they had over the last 6 weeks or so. Most of these names have rallied in the neighborhood of 50%. Thats just unsustainable.

    If you notice the June tops took several weeks to materialize. If these are multi-month or even yearly highs here......the topping process will probably take a week or so more again.

    I also liked these because of the crystal clear risk/reward set-ups. At the time of this post, the stocks had been consolidating or topping (whichever is your view on things to come) for a couple of days, very close to the highs. So, you have a clearly defined "right vs. wrong" line that isn't too far away. New highs.....and I'm either way early and gonna get gored......or I am completely wrong. Either way, I won't have to wait too long for an answer, or too much at risk in terms of a price move.

    And judging by today...........my thesis could get "blown away" tomorrow. Oil was really strong today. And the daily chart......just looks fantastic if you're bullish.

    I did put on 1/2 a position today in XEC - mainly because it came back to the prior range the most, i sold @ 38.20 fairly early. But, the stop is just over a point away. I should state that I will add if monday's lows are taken out.

    Only WLL and BRY actually broke their range yesterday. The other 3 have found quite a bit of support. Could be the making of a failed auction.

    And I should say that now, since we have had a decent correction here. You also have a clearly defined spot to bail if you want to buy here. Just set the stops at monday's lows. Again, clearly defined range - I would pick either NFX, XEC, or BRY as you can see, the lows were defended on monday....now the onus is on the sellers. We should have a fairly strong signal tomorrow hopefully. (These are 60 min charts of XEC and NFX)
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  6. rkahn

    rkahn Member weekly contest winner

    Very interesting points. Thanks for the response.
     
  7. aiki14

    aiki14 Well-Known Member won april/06 simulator won weekly contest 13x won feb/07 simulator won jan/07 simulator won nov/06 simulator won mar/07 simulator

    Hey HK, I took a short on XEC late in the day avg'd at 38.30. I like the concept of this thread and as I am short oil thought this would be a good addition to that thesis.
    On a negative note as I type this WTI Crude just hit 70.50.
    Index Futs are down so it is a wash going in if things stay the same.
     
  8. Horace Kent

    Horace Kent Member weekly contest winner

    No shit!? Great minds........yada yada.......well we should know tomorrow.

    I was a little early this morning. Trying to "anticipate". Thankfully I kept the position small. I'm thinkin 39.50 will be my stop. That is above last wed and thurs highs - and spitting distance from the high of the bull move. I figure if 39.50 gets hit, price "should" run to 40. And it could take a while to roll over if it gets that high. Still though...lots of room below. And, I'll be watching if this go around doesn't pan out. I'll give it one more crack if I get stopped out this week.


    One thing that I didn't figure on oddly enough considering the Hurricane thread and my lotto ticket position in UNG oct calls........is a hurricane.

    "Bill" is making the news a little today. That may have brought a bid into oil.

    It will be interesting to see if Oil can sustain a hurricane bid. And if nat gas can even get a bid.

    Fast money guys are talkin liquidation down to $2 if 3 is broke.....Probably because there are a lot of longs in naty gas.


    Oh yeah, I notice that oil barely eclipsed last thursday's high tonight. Lot of tops were made right around 72.20 - Oil is on the cusp of either getting smacked down again, or breaking out to $80.

    And considering the consolidation these stocks have had the past week or so.... if oil trades over 73 on volume.....you could reverse the position a scalp out a couple points on any of these stocks for the remaining days this week.

    But, so far this evening - once 72.25 was hit (on the MiNY contract) its been sold. Off 1% since that high.
     
  9. Horace Kent

    Horace Kent Member weekly contest winner

    Very Interesting data from.........surprise surprise..........ZeroHedge.....

    EUR/JPY correlation with WTI
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    Inventories....wow
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  10. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

    Oil will continue to rise to 85....i wouldnt be short oil here

    Buy

    DVN
    SWN
    CVX
    LINE
    RIG
     
  11. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

    Full Disclosure.


    I and my firm own none of the above equities

    Red Stripe Investments is long COP
     
  12. useless

    useless Member won weekly contest 18x

    I bet you are. Probably 10k shares of COP? with a base of 47 somehow?

    Interestingly enough, I am long LINE in an IRA. Tax implications suck hard with LINE, although it has been rocking for awhile. Dividend is nice.

    It is nearly at a 52 week high, I think I am going to dump it as i am way up since getting in. May also just continue to hold it and buy more when its under 18 again soon

    I also dont know why you would get in DVN for any reason right now either. Where the hell do you come up with this stuff? Dividend sucks relative to Oil/NatGas and servicers, chart kinda sucks too. daily stochastics going wrong way, looks like a short except it gapped down already.

    same with cop.

    Or maybe I dont see what you are seeing, you provide no real analysis.

    better hope you get a Katrina.
     
  13. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator

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    Looks like a good chart to me. Its trending upward from 40 very impressive. This is being recommended as an investment not a trade, never make a trade an investment or the inverse. I am an investor at heart and fairly new to swing trading. I like the trend and i'm bullish on oil.

    Now lets look at COP....I have a base of 38.67 with 12,000 shares
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    Trending slowly upward from 35...its been a laggard hence i didn't recommend it or endorse it at these levels. I am holding through the dividend date to get my $6,000 then i'm out and probably going to initiate a positon in LINE, or maybe CHK...I'm VERY BULLISH Nat Gas....

    Happy Trading..
     
  14. Albert0373

    Albert0373 forum leader won weekly contest 8x won sept/07 simulator won feb/09 simulator won july/08 simulator won oct/07 simulator won june/08 simulator


    "We have a small staff of RIA's and operate with net assests of under $250,000. We are a rapidly growing group of young professionals."

    1. Nice math
    2. Are we supposed to be amazed you dropped half a mil in COP?
    3. "35" is young?
     
    Mastajab likes this.
  15. RedStripe

    RedStripe Active Member won weekly contest 4x won july/10 simulator won oct/09 simulator


    Albert you truly have no life.
     
  16. Mastajab

    Mastajab Moderator won weekly contest 2x

    I think oil is going to <$65. That after hours oil jump was uncalled for. Prolly just another rogue european futures trader.
     
  17. aiki14

    aiki14 Well-Known Member won april/06 simulator won weekly contest 13x won feb/07 simulator won jan/07 simulator won nov/06 simulator won mar/07 simulator

    Actually you are wrong (hard to believe, right?) I've spoken to Albert on the phone a few times, as well as had a couple years of interactions with him here. I have found him to be honorable and generous with his time and the information he provides.
    Contrast that with yourself, who has posted a series of poorly written contradictory nonsense. I would call your posts self serving but you deny actually being who you said you were. Your firm doesn't actually exist, the website you list for it in your profile is non existent, and your descriptions of yourself and the firm are inconsistent.

    Albert brings a positive contribution backed up by time here that is remarkable, and you brig a web of deceit backed up by hot air and quite frankly at this point your very presence here reeks of some criminality, or dementia. Certainly nobody is going to take you seriously here at this point, so you are relegated to the role of troll or buffoon. Why waste your time?
     
  18. aiki14

    aiki14 Well-Known Member won april/06 simulator won weekly contest 13x won feb/07 simulator won jan/07 simulator won nov/06 simulator won mar/07 simulator

    I took the position after reading your post and finding I liked the idea and could justify a position. I would have set a 38.70 stop, because at that point I would have thought the trade was going against me but now I'll bail at 38.20 if it prints and secure a small profit. I have an order to reduce at 37.90 which I should have put on the board earlier and locked some in, but was slow this morning.
     
  19. aiki14

    aiki14 Well-Known Member won april/06 simulator won weekly contest 13x won feb/07 simulator won jan/07 simulator won nov/06 simulator won mar/07 simulator

    As I wrote the previous post the stop was triggered and I am out with a small profit. Will watch for re-entry points from here
     
  20. aiki14

    aiki14 Well-Known Member won april/06 simulator won weekly contest 13x won feb/07 simulator won jan/07 simulator won nov/06 simulator won mar/07 simulator

    Took a 1/2 position short in XEC at 38.40 might add a little in either direction.
     

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