27
Jun
Wrap – Week Ended 06/25/21
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Another strong week for traditional oil and gas and traditionally tied groups including oil service. The renewable energy groups continue to edges towards a rebound having previously peaked in January and February. The ZLT was up 7% last week as we continue to be a well rounded mix of both. We got busy this month, adding more weight within gassy, oil service, grid exposed and commercial EV names. The oily names in our portfolio are outperforming the XOP and other oil name benchmarks noted in the table below on a year to date but more importantly on a two and three year basis as we've stuck with quality balance sheets over "high leverage must have higher commodity price" names.
The non commercial net oil long to short ratio hit 7.8x last week, the highest level of 2021. Anything of 6x we consider nose bleed territory, worth watching closely, and potential leading to a sharp (if brief) substantial pullback on not so apparently bearish news for oil (be it in the form of Iran sanctions lift or something unexpected like Venezuela or just a slightly bigger than expected increase in production from OPEC+ next week).
Natural gas continued it's recent surprising to most push higher. The rally is not surprising here (to us at least) beyond the magnitude of it as we've been calling for strength in exports (volumes to Mexico set another new record high last week while LNG is holding near record territory and imports from Canada have weakened as expected) and gas-fired generation demand to more than offset production gains on the activity rebound. We added more gassy exposure in low differential basis this quarter, month, and week. The 2022 natural gas strip, which will be key as analysts and management teams ponder prices for out year cash flow and banks consider fall RBL levels has seen phenomenal change of late:
Holdings Watch:
- Last week we added to natural gas names, one oil service name (multiple adds), a commercial EV name, and we entered a new grid name.
- The blotter is updated
Free Stuff Last Week:
Questions and comments under The Wrap will be addressed in the Monday post.
Questions about the site or for a low cost test drive subscription can be sent to zman@zmansenergybrain.com
Have a great rest of the weekend, and stay cool Pac northwest,
Z
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FAN Wind Power ETF…Trading in a tight range on the weekly and daily time frames at major acceptance…Demand volume flat, waiting for a catalyst.
Weekly
https://i.postimg.cc/T1MDFcHh/fanw.png
Daily
https://i.postimg.cc/Bb0jMnXK/fand.png
VWDRY Trading a major acceptance…Demand volume positive ….Looking for a break above 13 for the next leg up.
Weekly
https://i.postimg.cc/rpRGHzFn/vwdryw.png
Daily
https://i.postimg.cc/BnrPXp4p/vwdry.png
TPIC Choppy range bound trading since March…Monthly and weekly range tightening. Sporadic demand volume just began to turn up….
Weekly
https://i.postimg.cc/j5FDY4gy/tpic.png
Daily
https://i.postimg.cc/zvYVfGNf/tpic-1.png
BWEN Flat narrow range trading at major acceptance …Demand volume flat…next leg begins with a break above 5.15
June 27th, 2021 at 8:46 amWeekly
https://i.postimg.cc/d3Xv0Wrj/bwenw.png
Daily
https://i.postimg.cc/htRW3Qrv/bwend.png
Clean Energy ETFs
June 27th, 2021 at 8:47 amPBW and ICLN both trading in narrow ranges at major acceptance…Demand volume positive. Nice setups…
PBW
https://i.postimg.cc/PrSgMV7X/pbwd.png
ICLN
https://i.postimg.cc/52GDhY1D/iclnd.png
XOP Friday’s close broke above June’s value area. Demand volume remains supportive of higher….reflected in all the Z4 O&G names
June 27th, 2021 at 9:07 amhttps://i.postimg.cc/V6Rr6bfk/xop-1.png
OIH..Demand volume tailed off some in most of the service stocks….Pull backs within uptrends…
June 27th, 2021 at 9:21 amhttps://i.postimg.cc/RC3Fn8ZB/oih.png
QS Continues to recover from the hit piece…Trading well above previous acceptance at 27.54…Weekly and monthly acceptance shifting higher…Demand volume is positive
June 27th, 2021 at 9:27 amhttps://i.postimg.cc/mkQJxBBM/qs.png
STEM Demand volume rolling off now at 34.25, previous major acceptance…Expecting back filling to continue within the value area highs/lows from 35.95 and 31.97…. A dip out of June valume has support at 29.68…Much above 36.50 sets up another leg higher if/when demand volume picks up again…
June 27th, 2021 at 10:27 amhttps://i.postimg.cc/tTFBSb3x/stem.png
Thanks Zorg. Re 1 – VWDRY – agreed, lot of positive momentum into quarter end.
Re 3 – the XOP chart is pretty telling, super strong.
June 27th, 2021 at 11:12 amnoting….Not a Z4 stock..
June 27th, 2021 at 1:00 pmHighly speculative…Lithium stocks picking up…ALB, PLL
PLL setting up a nice multi-month base..high short interest
https://i.postimg.cc/ZnHC4ftq/PLL.png
Guy asking VEI FCF yield over on twitter.
Response, it depends on year given the hedges but 2021 or 2022 it’s pretty solid.
June 27th, 2021 at 6:57 pm