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We were triggered on 50% of our watch list entries last week and only missed the other two by a few cents. Questar missed our entry at $82 by 75 cents before soaring to $88.78 on Friday. Valero missed our entry at $108 by 50 cents before soaring to $117.25 on Thursday.

I really wish we had scored on both of those as well since buying on a down draft always insures cheaper options. Now that they have run +10% in a week both are now expensive.

I fear the only way we are going to get into a Questar play is with a breakout entry but I hate to do that in this market and on top of those already strong gains.

Since we have a full portfolio at ten plays I am going to keep both of these targets on the list with breakdown entries only. We may never get them but if we do they should be almost instantly profitable on any rebound.

If you were watching on Monday as some readers were then you probably did not let these plays get away from you. I know several readers pulled the trigger when it was apparent they were not going any lower. Congratulations to everyone who took that action.

Good luck!
 

Dropped Entries

None


New Watch List Entries

None

Current Watch List

VLO - $112.95 Valero - refiner

STR - $88.03 Questar - gas production/distribution

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VLO - $112.95 Valero

** Breakdown Target $110.00 & $108.00 **
** Breakout Target - none **

Valero Energy Corporation (Valero) owns and operates 15 refineries having a combined throughput capacity, including crude oil and other feedstocks, of approximately 2.5 million barrels per day. Valero produces environmentally clean refined products, such as reformulated gasoline (RFG), gasoline meeting the specifications of the California Air Resources Board (CARB), CARB diesel fuel, low-sulfur diesel fuel and oxygenates (liquid hydrocarbon compounds containing oxygen). It also produces conventional gasolines, distillates, jet fuel, asphalt and petrochemicals. Valero markets branded and unbranded refined products on a wholesale basis in the United States and Canada through a bulk and rack marketing network. It sells refined products through a network of more than 4,700 retail and wholesale branded outlets in the United States, Canada and Aruba. Valero's retail operations include approximately 1,500 company-operated sites that sell transportation fuels and convenience store merchandise.

Breakdown Target @ $110.00
BUY JAN 2006 $115 CALL VLO-AC

Add to position with a drop to $108.00, stop loss $106

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STR - $88.03 Questar

** Breakdown Target $86.00 **
** Breakout Target - none **

Questar Corporation (Questar) is a natural gas focused energy company with three principal lines of business gas and oil exploration and production, interstate gas transmission, and retail gas distribution. Questar conducts most of its operations through its subsidiaries Questar Market Resources (Market Resources), Questar Pipeline Company and Questar Gas Company (Questar Gas). Market Resources is a sub-holding company that owns Questar Exploration and Production Company (Questar E&P), Wexpro Company (Wexpro), Questar Gas Management Company (Gas Management) and Questar Energy Trading Company (Energy Trading). Questar Pipeline provides interstate natural gas transmission, storage and gas processing and treating services. Questar Gas conducts retail natural gas distribution.

Breakdown Target @ $86.00
BUY APR 2006 $90 CALL STR-DR
 

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