USO $78.60 - Oil Fund - Short *** Stop Loss $80.50 ***
I sent out an alert on Tuesday afternoon to change the strike and take a hard entry with the price of the USO at $78.66 the day before futures expiration.
Pickens comments on Thursday caused crude to ease slightly but prices firmed ahead of the weekend. Assuming nothing happens in the energy sector over the weekend we might see a decline begin next week.
I am putting a stop on this play just in case something happens to push prices higher.
I believe the spike in oil prices is going to fail at current resistance and decline towards the end of March. I am using the USO as a direct reaction to the price of oil rather than the XLE or equivalent index, which contains oil service stocks and could soften the drop.
Entered before the close on 2/19 with USO @ $78.66
Position: April $77 PUT UNA-PY @ $3.50
Target $70.00 for an exit.
OII $62.18 - Oceaneering Intl
OOPS! I messed up on this one. I thought OII already had reported earnings or I would not have initiated the play. The guidance caused a -$5 drop to $60 but OII had a nice day on Friday. I actually thought the guidance was not that bad only a few cents light. Given all the maintenance problems they were facing for the quarter I was surprised they guided so high. I think we are going to be all right but I will watch it closely.
Oceaneering International, Inc. is a global oilfield provider of engineered services and products primarily to the offshore oil and gas industry, with a focus on deepwater applications. Through the use of its applied technology capabilities, the Company also serves the defense and aerospace industries. The services and products the Company provides to the oil and gas industry include remotely operated vehicles, mobile offshore production systems, built-to-order specialty hardware, engineering and project management, subsea intervention services, nondestructive testing and inspection, and manned diving. Oceaneering International, Incs business segments are contained within two businesses: services and products provided to the oil and gas industry (Oil and Gas) and all other services and products (Advanced Technologies). In July 2007, the Company announced the acquisition of Ifokus Engineering AS, a Norwegian designer and manufacturer of specialty sub-sea products.
Breakout trigger: $65.50 (2/19)
Position: Short July $75 PUT OII-SO @ $12.80