04
Aug
Wrap – Week Ended 8/3/12
Much ado about nothing week in the broad markets (see red circle below) but no so on the energy earnings front made good progress in combating lower commodity prices via improved mix and lower per unit operating costs in the quarter. Many of the gassy names have moved further into the lean mean fighting machine category and will show improved EBITDA lines as natural gas prices mount a growing recovery (see The Week That Was section in this coming Monday's post). We continue to be measured pace buyers in both gassy turnaround and oil growth names, especially on days like Wednesday and Thursday where Ben and Mario failed to come with what the market thinks it needs.
Close trades this past week:
- KOG – Sold the August $8 puts for $0.70, up 84%, on the mid and easily with the stock at $7.69. This trade essentially pays for the $7 strike puts that I will likely hold through their earnings announcement tomorrow.
- HK – Sold (15 of 30) HK August $7 calls for $0.60, up 100%, 0n the mid and easily with the stock at $7.60 after CEO Floyd Wilson spoke on CNBC about yesterday's operations update.
The wrap comments will be incorporated into the Monday post.
Share and Enjoy
NG matches Coal in US Electrical Power generation (almost) according to Bloomberg:
August 4th, 2012 at 9:56 amhttp://www.bloomberg.com/news/2012-08-03/natural-gas-matches-coal-as-top-u-s-power-fuel-bgov-barometer.html
Z, thanks for your very nice analysis of KOG in post 145 yesterday. In the recent past you have concluded that KOG has been over priced versus similar companies. We have a choice of having our money invested in KOG or some other similar company, such as BCEI, NOG, EOG or CLR, I am thinking that now that you have all the data in post 145 well in hand you could apply it to make a comparison of at what stock price KOG is no longer over priced versus those other investment possibilities. Of course the stock price probably won't move to where it is no longer over priced but It would be very interesting to know approximately how "over priced" KOG is, especially now that it backed off in the last few days.
August 4th, 2012 at 9:57 amRe 2 – Have a little thing already worked up for the Monday post, but not going to discuss in the open forum of the weekend.
Ernesto and Invest 91L look to be heading to the Gulf
http://www.myfoxhurricane.com/
August 4th, 2012 at 11:54 amRe: Thanks in advance. Monday is fine.
August 4th, 2012 at 3:29 pm
August 5th, 2012 at 9:20 amS&P 500 Futures Weekly Notes/Thoughts
Market is extended at the upper end of the volume profile established in March and retested in May. Demand volume remains generally supportive, though very erratic and is not confirming last week’s highs on any time frame. Market is on the final bar of a weekly DeMark exhaustion sell setup. Breadth reflects the recent swing from the June lows but is approaching overbought. (% of S&P500 stocks > 10 day MA). VIX is approaching oversold levels. POMO activity is neutral/supportive though 8/14. . Bulls remain in ragged control as long as the market continues to reject the major CHVN/Volume pivot at 1351 as too low.. The low volume zone between 1360-1380 offers few defined levels and opportunity for continued volatility in either direction. Looks choppy/toppy to me into increased long term congestion and intermediate low volume rejections levels above 1394.
CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone
1411.75 CLVN, March highs
1394 CLVN, May high strongly rejected.
1360-80 Low volume zone. Quick moves in either direction likely
1354-57 Minor Support, CLVN
1351 CHVN, Short/Intermediate term Volume Pivot. Bullish bias above.
1340.25 CLVN. Break lower works to 1321.
1321 CLVN, Support
1309 Major Long and Intermediate CHVN
http://www.charthub.com/images/2012/08/05/ES_Composite.png
August 5th, 2012 at 9:36 amXLE Big cap energy reached long term acceptance last week (71) and continues to have supportive longer term demand volume. Expecting sideways movement above support at 69.70 with 72.61 offering stiff resistance on any rally.
http://www.charthub.com/images/2012/08/05/Stock_Weekly_2.png
August 5th, 2012 at 9:50 amXOP E&P ETF No change from last week with continued rips and dips between 48.90 and 51.88. Demand volume improving but never really going positive on the longer time frames. Still moving easier on the down days on bigger volume. Selective strength in individual stocks. Only 14 of 60 on my radar moving easily in the intermediate term. (85 days)
http://www.charthub.com/images/2012/08/05/Stock_Weekly_2_2.png
OIH Equipment/Services ETF
August 5th, 2012 at 10:08 amDemand volume continues to improve above support levels at 35.43(minor) and 37.62 (major). Price closed at long and intermediate term acceptance on Friday. Looks ready for more to resistance at 41.98 with dips to support likely to get bought.
http://www.charthub.com/images/2012/08/05/Stock_Weekly_2_3.png
August 5th, 2012 at 10:30 amDemand volume coming in at support (87). Expecting continued choppy between 87-94. 91 is another area of interest.
http://www.charthub.com/images/2012/08/05/Crude_Composite.png
The Blotter is updated
http://zmansenergybrain.com/subscriber-data/zeb-zlt-blotter/
August 5th, 2012 at 4:42 pmThe ZMT and ZLT C positions have been updated
http://zmansenergybrain.com/subscriber-data/holdings-wiki/
August 5th, 2012 at 4:55 pmEuro..$USD/Euro continues to be supportive of stocks/commodities above 1.2357
August 6th, 2012 at 10:32 amhttp://www.charthub.com/images/2012/08/06/Euro_Composite.png