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XLE $74.62 +3.82 - Energy Select SPDR

Very nice rebound off support at $70 and the $2 decline on Friday was barely noticed.

The XLE is a group of 36 companies in the energy sector. Exxon is the largest component and Tesoro the smallest. See the complete list here.

ETF Info:

Energy Select Sector SPDR Fund (the Fund) seeks to provide investment results that correspond to the price and yield performance of the Energy Select Sector of the S&P 500 Index (the Index). The Index includes companies that primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. The Fund utilizes a passive or indexing investment approach to invest in a portfolio of stocks that seek to replicate the Index. The Funds investment advisor is SSgA Funds Management, Inc.

Breakdown trigger: $72.00, hit 8/04

Position: Dec $80 Call XTG-LB @ $3.00

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UPL $65.65 +1.39 - Ultra Petroleum

UPL lost $6 on Thr/Fri and the implosion in nat gas. No news specific t UPL. Our stop is $58.

Prior commentary:

Ultra reported earnings on 8/05 that more than doubled the comparison quarter on a 125% increase in revenue. Production rose +23% and the average sales price of gas was $8.06 per mcf. They get less for their gas because of their location in Wyoming. Once the pipeline is finished to the east coast their profits will again accelerate sharply. They have no downside risk with an active hedging program and no offshore or out of country assets.

Breakdown trigger: $65, hit 8/05

Position: 2010 $80 LEAP WSS-AP @ $13.50

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APC $58.65 +1.04 - Anadarko Petroleum

Despite falling $4 from the Thursday high APC still closed the week with a gain. This is on top of a very strong gain last week. APC will present at the Lehman Energy conference on 9/3. APC cancelled a deal to do some service work with Iraq when Iraq said It was not going to sign long term contracts with those initial companies doing the front end leg work. I think it was the right idea for APC to bow out.

No change. Stop at $49.

Breakdown trigger: $55, hit 8/04

Position: 2010 $70 LEAP Call YPC-AN @ $7.60

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BHP $69.54 +4.32 BHP Billiton

BHP reported record earnings and then pressed its case for the $127 billion takeover of Rio Tinto saying it makes more sense than ever to combine the two firms. Approvals from regulators are not expected until November.

Breakdown trigger: $65, hit 8/05

Position: 2010 $80 LEAP Call LPH-AP @ $9.50

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COP $83.18 +5.52 - ConocoPhillips

Warren Buffett may be regretting he sold his stake in COP after that $9 intraweek rebound. The $2 drop on Friday still left us with a nice gain. There was no specific news.

Earnings July 23rd, $3.50 per share

Position: 2010 $90 LEAP YRO-AR @ $11.35

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ENER - $79.38 +9.31 Energy Conversion Devices

Outstanding! The solar news just keeps firing up buyers of ENER. Earnings are next week (28th) and they are expected to be strong. A breakout over $82 puts ENER at a new high and in blue sky territory.

Breakout trigger: $68.50 hit 6/16

Position: 2010 $80 LEAP Call KYU-AP @ 23.10

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CRR $58.36 +2.36 - Carbo Ceramics

Very close to a new high and a nice gain on top of a strong gain in the prior week. Zacks continues to pound the table every other day on CRR and we are along for the ride.

Breakout trigger: $48 Hit 5/12

Position: Dec $50 Call CRR-LJ @ $5.80


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Non-Energy Positions
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RIMM $131.45 +$2.65 Research in Motion

RIMM recovered from the option expiration pressures from the prior week and tested $134 on Friday. RBC said the new BlackBerry Bold now delivering in Canada is just the first in a line f new product releases. The touchscreen Thunder and Kickstart flip-phone will broaden RIMM's marketability and cut into Apple's 3G iPhone market. Palm's new Treo is not expected to impact the BlackBerry market. No change.

Prior comments:

RIMM is a combo play this time around to offset the extreme cost of the call option. We bought the call for $27.50 and sold the $110 put for $20.90 for a net debit of $6.60. In theory the call will continue to appreciate as RIMM moves higher and the put will continue to decline as it gets farther out of the money.

Breakout trigger: $125, hit 8/06

Long 2010 $140 LEAP Call YKD-AH @ $27.50
Short 2010 $110 LEAP Put YKD-MZ @ $20.90, net debit $6.60
 

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