04
Aug

Wrap – Week Ended 8/3/12

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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. 

12 Responses to “Wrap – Week Ended 8/3/12”

  1. 1
    crysball Says:

    NG matches  Coal  in  US Electrical  Power   generation (almost)  according to Bloomberg:
    http://www.bloomberg.com/news/2012-08-03/natural-gas-matches-coal-as-top-u-s-power-fuel-bgov-barometer.html

  2. 2
    DaveH Says:

    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.

  3. 3
    zman Says:

    Re 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/

  4. 4
    DaveH Says:

    Re:    Thanks in advance.   Monday is fine.

  5. 5
    Zorgnak Says:

     
    S&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

  6. 6
    Zorgnak Says:

     
    XLE 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

  7. 7
    Zorgnak Says:

     
    XOP  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

  8. 8
    Zorgnak Says:

    OIH  Equipment/Services ETF
     
    Demand 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

  9. 9
    Zorgnak Says:

     
     Demand 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

  10. 10
    zman Says:

    The Blotter is updated

    http://zmansenergybrain.com/subscriber-data/zeb-zlt-blotter/

  11. 11
    zman Says:

    The ZMT and ZLT C positions have been updated

    http://zmansenergybrain.com/subscriber-data/holdings-wiki/

  12. 12
    Zorgnak Says:

    Euro..$USD/Euro continues to be supportive of stocks/commodities above 1.2357
    http://www.charthub.com/images/2012/08/06/Euro_Composite.png

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