Intra-Week Blog, Tuesday, 04/25/2006 01:26:03 PM ET
HAVING TROUBLE PRINTING?
Buy the Dip?
Oil may have completed its bout of profit taking with the dip on Tuesday morning to $71.75. I closed my crude futures short at around $72 and bought the dip on several energy stocks I wanted to add to my personal portfolio.
The IYE puts I mentioned on Friday hit my projected profit stop today at IYE $97.50.
Burlington Northern (BNI) was hammered today for a -$5.00 loss after reporting very strong earnings. All the rails were in the same boat so it appears to be "buy the rumor, sell the news" producing some normal profit taking. For a trade I like the BNI July $85 Calls BNI-GQ since BNI halted its fall at decent support at $82.
Valero also reported record earnings and was knocked for a -2.50 loss for the morning. This is right back to that 100-period average on the 30-min chart I wrote about on last weekend. Could be a good entry point for those not already in the trade.
If the $72 dip in crude this morning is not the final dip then $70 is the likely target and the next level to enter new long positions. Wednesday's inventory report should show a continued decline in gasoline but a potential build in crude. The gasoline problem should support prices.
Iran is coming to a crisis point later this week and the sound bites from the Iranian President do not show any evidence of moderation. I look for the situation to escalate to the next level but sanctions are out until Russia and China agree. This means just more verbal wrangling and the potential for Iran to stay in the news and help support prices.
Tenaris (TS) is taking a eral hit today that I believe is only temporary but options are VERY expensive as they should be for any stock that has gained +$60 since April 1st. I would look to buy the dip at $230 but only with a very small position. RISK is high but so is reward.
Some of the energy earnings for the rest of the week include:
Wednesday: AHC, APU, BHI, COP, CLB, DO, ECA, FCL, LSS, NOV, NSC, RDC
Thursday: APC, CNX, CAM, XOM, ICO, MRO, MEE, NFX, NHY, WLL
Friday: ATW, CCJ, CVX, CEG