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Play Updates

In Play Updates and Reviews

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The current format of the Play Updates has changed. Only the pertinent data that has changed from the prior week will be shown in an effort to concentrate more on new commentary on new plays rather than restating existing positions. Each play has a link back to either its last full commentary or its initial description.

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OSX - $185.41 -0.96 Oil Service Index - Stop loss OSX $160

No change, support at $180 is holding.

Index Description:

The Philadelphia Oil Service Index is an index of 15 companies that provide drilling and production services, oil field equipment, support services and geophysical/reservoir services. This index contains companies like Halliburton, Nabors, Schlumberger, etc.

Complete list of OSX components

To see the initial commentary on this position click here:
http://tinyurl.com/yghpyo

Breakdown trigger $185 hit Jan-04

Position:
SHORT Sept $250 PUT - OFJ-UJ @ 58.50, Stop loss OSX $160

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ECA - $46.15 +1.28 - Encana

Encana announced it had sold all its interests in Chad to a subsidiary of the China National Petroleum Company (CNPC) for $202.5 million. Encana had drilled 11 wells in seven sedimentary basins with encouraging results. However, Encana has decided to exit its non core assets to focus more on North America properties. This concludes its liquidation of all assets in Africa.

Encana is respecting the support at $44 and the level where we entered the play. No change. Pray for cold weather.

To see the initial commentary on this position click here

Earnings schedule: Feb-15th

Breakdown target: $45 hit Jan-3rd

Position: 2009 $50 LEAP Call ZBM-AJ @ $6.60

Insurance put: None

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THE $32.73 +0.08 - TODCO

No news. Strong support just below at $44. No change in play

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $43

Breakdown target $39 hit 12/7/06

Position: 2009 $45 LEAP ZYU-AI @ $8.40

Insurance Put: None

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CHK $28.05 -+0.10 - Chesapeake Energy

Still respecting support. No news. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Feb-23rd

Current recommendation: Buy at $29

Position: 2009 $35 LEAP VEC-AG @ $5.30

Insurance put: none

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SNP - $84.30 -6.65 Sinopec *** Stopped $88.50 ***

Sinopec finally cracked and it happened all at once. After holding up great for a week while everybody else was diving the end came swiftly on the 10th. We still escaped with better than a +100% gain so no complaints with this trade.

I would like to buy SNP again with a different strike but I am not sure it is done correcting. I will keep watch and notify you if we get another chance like the last one.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $85

Entry $74.44 11/28/06

Position: July $80 Call SNP-GP @ $5.40, exit $12.00, +6.60

No insurance

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FXI $105.40 -0.55 - FTSE/Xinhua China 25 Index Fund

The FXI took another dip this week to a low of $98.23 but recovered significantly once profit taking in China slowed. The Chinese indexes were up huge last year and it was time for a pause. I still consider this a buying opportunity.

The iShares FTSE/Xinhua China 25 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index.

Component list

This iShare focuses on the largest companies in China (58% of it positions) and Hong Kong (42%). These are the most liquid companies in these markets. With Asia growing by leaps and bounds the FXI generated a +40% return in 2005 without using options. We hope to do better using LEAPs.

Current recommendation: Buy under $105

Breakout target: $94.50 hit 11/22/06 on gap open to $95.80

Position: 2009 $100 LEAP Call VHF-AT @ $13.50

No insurance

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MRO $86.77 +0.85 - Marathon Oil

Marathon posted its mid quarter update saying that sales of refined products slipped slightly in Q4 and sales prices of oil also fell. Production available for sale remained in the predicted range. Earnings will be announced Feb-1st. MRO gained +3.34 on Friday and was one of the stocks I singled out on Thursday night as a speculative buy. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $85

Position 2009 $100 LEAP Call VXM-AT @ $12.60

Insurance put: None

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HES - $49.02 +1.07 - Hess Corporation
(Formerly (AHC))

Hess is holding over support at $47 on no news with earnings 2-weeks out. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Jan 31st

Current recommendation: Buy at $46

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, stop loss $51.50

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BTU - $40.00 +2.78 - Peabody Energy

BTU was the surprise of the week with a nice rebound from the prior week's drop. Citigroup was the benefactor with a buy recommendation pumping the stock. Citigroup said its rating was based on a positive longer-term view of Peabody's production growth, its strategic position within the coal industry and the inherent value of its massive reserve base. Citigroup also said it expects the coal market to normalize between the bullish extremes of 2005 and the "bearish misery" of 2006 as U.S. power generation rises by 1.5 percent this year. In the longer term, the industry could also benefit from technologies such as Integrated Gasification Combined Cycle (IGCC) with carbon capture and Coal-to-Liquids (CTL), the brokerage said in its research note.

Too bad they did not issue the recommendation the prior week before our insurance put was triggered. I am keeping it one more week just in case.

To see the initial commentary on this position click here

Earnings schedule: Jan-25th

Current recommendation: Buy at $35

Position:
10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70

Insurance put: Triggered with drop through $39
01/03/07 March $35 Put BTU-OG at $1.15, stops at $35 and $42.50

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DVN - $65.63 -1.45 - Devon Energy

No news and no change in play. Cramer is still pounding the table on it and support at $64 is holding.

I suggest closing the insurance put if DVN trades at $68.50.

To see the last full commentary on this position click here

Earnings schedule: Feb-7th

Current recommendation: Buy at $65

LEAP Position:
10/03/06 Position: 2009 $70 LEAP Call VVH-AN @ $9.00

Insurance put: Triggered 12/18 at $69
Position: Apr-2007 $60 Put DVN-PL @ $1.30, close at $68.50

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RIG - $74.67 -1.88 - Transocean Inc

RIG was one of the weaker stocks despite winning a $493 million contract from Chevron for global exploration. The contract has a 10% bonus clause as well. I think we hit decent support at $72.50 and could move higher from here depending on sector earnings.

Their rig report released Jan-5th

To see the last full commentary on this position click here

Earnings schedule: Feb-14th

Current recommendation: Buy at $75

LEAP Position:
10/03/06 Position: 2009 $80 LEAP Call VOI-AP @ $12.90

Insurance put: Triggered at $79 on Jan-3rd
1/3/07 Feb $75 PUT RIG-NO @ $2.55, stops $70.50, $78.50

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TSO - $67.98 +2.31 - Tesoro Corporation

Sprinted higher on Friday on no official news. They were mentioned early in the morning as an under priced refiner and evidently somebody with lots of cash was listening. No change in play.

Maintain a stop loss at $60. If we hit $60 support has failed.

To see the last full commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $62.50 with stop at $60

LEAP Position:
10/04/06 Position: 2009 $70 LEAP Call ZGC-AN @ $7.70

Insurance put: None

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APC - $41.83 +0.52 - Anadarko Petroleum

Support at $40 holding on no news. Earnings announced for Feb-6th. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-6thbr>
Current recommendation: Buy at $40, stop at $34

LEAP Position:
9/20/06 Position: 2009 $50 LEAP Call OCP-AJ @ $6.90

Insurance put: 9/25
Position: Jan $40 PUT APC-MH @ $2.35, stop @ $39.00

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SU $73.12 +0.47 - Suncor Energy

Suncor spiked +3.41 on Friday to bring it back from a nasty loss for the week. On top of the -6.65 loss from the prior week this sell off was entirely overdone. Support at $70 holding. No change in play.

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $70

LEAP Position: 9/11/06
Position: 2009 $80 LEAP Call OYX-AP @ $14.30
Cost update: +2.10 to $16.40 for expiration Dec put

Insurance put: 9/18
Position: Dec $60 Put SU-XL @ $2.10, expired

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SLB $57.89 -1.31 Schlumberger

SLB suffered another small decline after Bank of America said they expected some weakness in service companies due to declines in drilling activity from low oil/gas prices. SLB reports next Friday. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan 19th br>
Current recommendation: Buy at $60, stop at $54

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, no stop

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UPL $47.95 +1.07 - Ultra Petroleum

UPL continued to show strength and the rise in gas prices prompted a +1.65 rise in UPL on Friday. No news and no change in play. $45 is strong support and my recommended buy target. br>
UUPL said recently that their profit margins at $4 gas were +30%, $6 gas 50% and $8 gas 100%. They have a 16-year inventory of wells to be drilled.

AMEX Oil & Gas Conference Dec 5th
Enercom Oil and Gas presentation

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $45, stop at $40

LEAP Position:
9/12/06 Position: 2009 $60 LEAP Call OZH-AL @ $10.60

Insurance Put:
9/18 Position: JAN $40 Put UPL-MH @ $2.85, stop $39

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SUN $59.83 +0.15 - Sunoco

Sun held support and received an upgrade to "market perform" on Wednesday. We have to be grateful for small favors. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan-31stbr>
Current recommendation: Buy at $60, stop at $54

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, stop $54

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PXP $44.90 -0.95 - Plains Exploration

Minor loss on no news and no change in play.

OGIS Investment Conference on Oct-4th

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $44, stop $40

LEAP Position:
9/12/06 Position: 2009 $50 LEAP Call ZXL-AJ @ 7.50

Insurance Put:
9/25 Jan $40 Put PXP-MH @ $1.90, $35 stop

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FST $29.68 -1.54 - Forest Oil

Forest captured a major win this week with the acquisition of Houston Exploration (THX) for cash and stock equivalent to $51.57 per share. This was only a slight premium for THX and well below the $62 offered by Jana partners last June. THX hit a high of $71.50 last year and traded over $65 as late as August. Jana had been highly critical of Houston management and was highly positive on the Forest acquisition. Jana feels the Forest management team is top notch and they operate with a very low cost structure. The combined company will have about 2 TCF of gas reserves and daily production of 520 mcf. We took a hit on the announcement but I believe this is a positive for Forest and I added to my position on Friday. No change in play.

Enercom conference presentation

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $30, stop at $27

LEAP Position: 9/12/06
Position: 2009 $40 LEAP Call OJG-AH @ 4.50

No insurance due to cheap LEAP

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VLO $50.57 +1.21 - Valero Energy

Nice bounce from support! Let's hope it continues. No news and no change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-1stbr>
Current recommendation: Buy at $50, stop at $45

LEAP Position:
9/24/06 Position: 2009 $60 LEAP Call VHB-AL @ $7.70

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, stop $45

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PBR - $94.40 -1.01 - Petroleo Brasileiro

Petrobras claims the new attack by Hugo Chavez on gas producing assets in Venezuela has no impact on their operations in conjunction with PDVSA. Support held. No change in the play.

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $96, stop at $88

LEAP Position:
9/08/06 Position: 2009 $100 LEAP Call VDW-AT @ $14.90

Insurance put:
9/11 January $70 PBR-MN @ $1.80, no stop

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DO - $76.82 -0.45 - Diamond Offshore

No news, minor drop, earnings scheduled, no change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-8thbr>
Current recommendation: Buy at $75, stop at $69

LEAP Position:
8/29/06 Position: 2009 $80 LEAP Call VCT-AP @ 14.20
Cost reduction: Oct $70 Put profit -3.15, cost now $11.05
Cost increase: Dec $60 put expired -2.40, cost now $13.45

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, expired

Position closed:
10/03 October $70 put DO-VN @ $1.65, exit @ $4.80, +3.15

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ATPG - $37.61 +0.11 - ATP Oil and Gas Corp

ATPG announced record production of 50.5 bcf in 2006. Oil production increased to 3.2 mmboe from its gulf operations compared to 0.7 mmboe in 2005. Still no earnings schedule. No change in play. I would be a buyer here based on the very strong outlook and activity in 2007 and beyond.

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $38, stop at $34

LEAP Position:
8/20/06 Position: 2009 $40 LEAP Call VCL-AH @ $11.70
12/17/06 Cost update expired Dec 35 put -1.50 = $13.20

Insurance put:
9/06 Position Dec $35 PUT HKU-XG @ $1.50, expired

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PTR - $127.40 -3.14 - Petrochina

The -$3 loss shown above is minor compared to the nearly -$9 intraday loss as of Wednesday. This stock has been hammered but I think the damage is nearly over. $125 appears to be support. Every Chinese stock has been beaten severely after setting a new high around Jan-1st. The profit taking on the indexes appears to be slowing. This is one of my favorite stocks and I bought the dip again this week. br>
II still believe this stock could be well over $150 before our 2008 LEAP comes due.

To see the last full commentary on this position click here

Earnings schedule: N/Abr>
Current recommendation: Buy at $128.50, stop at $124

LEAP Position:
5/14/06 Position: 2008 $120 LEAP Call LJC-AD @ $16.20
Cost adjustment: Close short Dec $115 call +1.30 = $17.50
Cost adjustment: Close long July $90 puts +3.00 = $20.50
Cost adjustment: Close long Sept $110 put -2.60 = $17.90
Cost adjustment: Expired Dec $100 put +2.20 = $20.00
Cost adjustment: Closed Jan $135 put -2.60 = $17.40

Insurance put: (12/31)
1/03/07 Jan $135 Put PTR-MG at $138.50, $1.90
1/04/07 Profit stop at $132.50, $4.50 for +2.60.

Insurance put: (9/11)
Position: December $100 Put PTR-XT @ $2.20, expired

Insurance put: (8/13)
Position closed:
Sept $110 Put PTR-UB @ $2.40, stop @ $106 @ $5.00, +2.60

Insurance combo: Closed
Short: Dec $115 Call PTR-LC @ $3.20, 6/13, exit $4.50, -1.30
Long: (2) July $90 Puts PTR-SR @ $3.70, 6/13, exit $0.70, -3.00

Insurance puts: (Closed 6/7)
CClosed: June $105 PUT PTR-RA, @ $4.20 (5/22), exit 6/7 @ $4.30

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Non-Energy Positions
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DHI - $26.40 +0.56 - DR Horton

Another uptick in housing sentiment is keeping DHI off the bottom and we have new housing numbers due out next week. Resistance at $27.50 is the current challenge. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan-23rdbr>
Current recommendation: Hold

LEAP Position:
9/24/06 Position: 2009 $25 LEAP Call VEI-AE @ $5.10

Insurance put: None
 

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