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Tuesday, November 30, 2010

Technical Trade Alerts 11/30/2010

BULLISH ALERTS


MACD Cross: BHI
Bullish Up/Down Slope Ratio Reversal: WLL

BEARISH ALERTS


21-Day/50-Day Moving Avg. Cross: ENI RDC
Stochastic Cross: POT

Monday, November 29, 2010

Technical Trade Alerts - 11/29/2010

BULLISH ALERTS


MACD Cross: INT
Price Is Up > 5% and Volume Is > 200%: SPN
Stochastic Cross: FRO NE

BEARISH ALERTS: None

Thursday, November 25, 2010

Technical Trading Alerts 11/24/2010

BULLISH ALERTS


MACD Cross: HOC NOV TGA XME
Stochastic Cross: ATLS BUCY

BEARISH ALERTS:

Up/Down Volume Ratio Slope Reversal: PBR

Wednesday, November 24, 2010

Weekly DOE Crude & Product Inventory Analysis 11/23/2010



·         Crude inventories build vs expectations of draw– Crude oil inventories increased 1.0 mmbbls last week, compared with expectations for a 2.0 mmbbls draw (per Bloomberg). Crude oil inventories are now sitting at 358.6 mmbbls, which is 6.2% above last year and 10.0% above the five-year average. 
·         Gasoline inventories build vs expectations of draw – Gasoline inventories rose 1.9 mmbbls last week, compared with expectations for a 1.3 mmbbls draw (per Bloomberg). Inventories of gasoline are now sitting at 209.6 mmbbls, which is 0.2% below last year and 4.0% above the five-year average.
·         Distillates draw below expectations– Inventories of distillates decreased 0.5 mmbbls last week, compared with market expectations for a 1.5 mmbbls draw (per Bloomberg). Distillate inventories are now sitting at 158.3 mmbbls, which is 5.2% below last year and 15.5% above the five-year average.
·         Refinery utilization increases – Refinery utilization was up 1.7% last week to 85.5% and compares to utilization of 80.3% last year and the five-year average of 86.6%.

Weekly DOE Natural Gas Storage Analysis 11/23/2010


Withdrawal slightly greater than expectations – The EIA reported a natural gas withdrawal of 6 bcf, slightly greater than expectations (as per Bloomberg) for a 1 bcf withdrawal but less than the five-year average of a 13 bcf withdrawal. For the comparable week last year, the EIA reported an injection of 2 bcf. 
Storage levels still at record highs – Total storage now sits at 3,837 bcf, or 0.1% above last year’s levels for the comparable week of 3,835 bcf, and 9.5% above the five-year average of 3,503 bcf.
Cooler outlook ahead – Over the past week, the U.S. reported gas-home heating degree days of 131, ~10% below the five-year average of 146, but ~16% above last year’s level of 113. Cooler weather is expected across much of the U.S. which should bode well for near-term natural gas demand. 

Tuesday, November 23, 2010

Technical Trade Alerts - 11/23/2010

BULLISH ALERTS


MACD Cross: KMP

BEARISH ALERTS


21-Day/50-Day Moving Avg. Cross: STO

Monday, November 22, 2010

Technical Trade Alerts - 11/22/2010

BULLISH ALERTS


21-Day/50-Day Moving Avg. Cross: CHK DRC
MACD Cross: ESV HOC PCX
Price Is Up >5% and Volume Is > 200%: TSO
Bullish Up/Down Volume Ratio Slope Reversal: IVN

BEARISH ALERTS: None

Friday, November 19, 2010

Technical Trade Alerts - 11/19/2010

BULLISH ALERTS


10-Day/21-Day Moving avg. Cross: HOS
21-Day/50-Day Moving avg. Cross: MMR
MACD Cross: ANR ASH CAM CLR CXO EOG KBR MMR NOV OIH PXP WLL WLT
Price Is Up>5% and Volume Is >200%: WLT
Stochastic Cross: CRK

BEARISH ALERTS: None

Is Massey Energy Saleable?

On October 20, 2010, The Wall street Journal broke the story that Massey (MEE) may be considering strategic options (read, "sale of the company") in the wake of the April mine explosion that killed 29 miners. In the ensuing days, the media was full of rumors as to who might be looking to buy MEE including the rival Alpha Natural Resources (ANR) and an Indian company.  An analyst report claimed MEE may be worth $60 per share in a buyout; there was talk of ANR having already submitted a bid.

I went long in MEE stock and options after the news and I am sporting a nice profit, but I am beginning to wonder if the expectations of a sale is realistic. For one thing, recently, the company's CEO stated that MEE might be looking to acquire other coal companies and despite all the takeover smoke, I have not seen any fire yet. The basis for my lingering doubts about MEE's attractiveness are as follows: 

1. The board of Massey is operating from a position of weakness, not strength because of uncertainty with the pending investigation of the Upper Big Branch mine disaster where 29 miners died.  It does not appear that safety concerns are over at Massey. The company announced it would close its underground mines  to conduct safety training.  
2. Central Appalachia (CAPP) is a very challenging environment in which to operate with much stricter environmental regulations, safety oversight, rapidly worsening geology, and limited pricing power because of low natural gas prices. The major U.S. coal producers all fully recognize the challenges facing CAPP producers and have been strategically underweighting CAPP for a decade.  Peabody Energy (BTU) spun off Patriot Coal several years ago for the above reasons.  Arch Coal (ACI) gave away its high-cost CAPP mines in exchange for giving away the legacy liabilities of those mines.  CONSOL Energy (CNX) has resisted the temptation to acquire CAPP reserves and, instead, made a major purchase of shale gas reserves earlier this year. Given all these considerations, are these companies now going to switch course simply because Massey's board is now reportedly a more willing seller?

3. Alpha Natural Resources (ANR) is the only company that is likley to bid for MEE since it has a preference for growth through acquisitions. However, ANR has diluted its exposure to Central Appalachia with the purchase of Foundation Coal.  Since about 75% of MEE's shipments are thermal coal, ANR is unlikely to acquire MEE at much of a premium based on ANR's view that the CAPP thermal coal market is in a long-term structrual decline.

4. Major global mining companies, which also have been mentioned as potential buyers, may not be attracted to MEE. These companies are usually interested in world-class deposits producing global seaborne commodities.  Massey has over 60 mines serving dozens of local customers. This would be difficult to manage from overseas and the operating synergies would be lacking to justify a takeover premium. And even further, these companies would need strong operating skills to take over MEE's mines. Since 2004, MEE has never hit its production and cost targets! These metrics are very important for a mining company since pricing is usually out of its control.
5. Finally, given the aforementioned risks and uncertainties facing CAPP producers, could long-term debt financing be obtained on acceptable terms to get potential private equity buyers interested in Massey? 

Massey's CEO, Mr. Blankenship, may be onto something though: All this takeover talk has stoked the MEE shares to almost $50 from the mid-30s, giving him a more valuable currency in his stock. Then again, the price of all small cap producers have recently jumped in the wake of the Walter Energy's bid for Canada's Western Coal, eroding some of Mr. Blankenship's purchasing power. Watch your positions carefully.

Thursday, November 18, 2010

Technical Trade Alerts - 11/18/2010

BULLISH ALERTS


MACD Cross: CBI FRO FST FTI NFX
Stochastic Cross: DNR FCX IPI NXY OIL OKE SU USO
Up/Down Volume Ratio Slope Reversal: CRZO

BEARISH ALERTS: None

Weekly DOE Natural Gas Storage Analysis 11/18/2010

        
Injection slightly below expectations – The EIA reported a natural gas injection of 3 bcf, slightly below market expectations (as per Bloomberg) of 8 bcf and the five-year average of 10 bcf. For the comparable week last year, the EIA reported an injection of 20 bcf. 
Storage levels set record highs – Total storage now sits at 3,843 bcf, or 0.3% above last year’s record high for the comparable week of 3,831 bcf, and 9.3% above the five-year average of 3,516 bcf.
Cooler outlook ahead – Over the past week, the U.S. reported gas-home heating degree days of 108, ~4% below the five-year average of 112, but ~17% above last year’s level of 92. Cooler weather is expected across much of the U.S. which should be good for near-term natural gas demand. 

Wednesday, November 17, 2010

Technical Trade Alerts - 11/17/2010

BULLISH ALERTS


21-Day/50-Day Moving Avg. Cross: PVA
Stochastic Cross: BHI CCJ CF CHK DO E EQT HES MOS REP

BEARISH ALERTS


10-Day/21-Day Moving Avg. Cross: TSL
MACD Cross: SHAW
Price Is Down > 5% and Volume Is > 200%: FSLR

Weekly DOE Crude & Product Inventory Analysis 11/17/2010



·         Crude draw larger than expected – Crude oil inventories decreased 7.3 mmbbls last week, compared with market expectations for no change (per Bloomberg) in inventories. Crude oil inventories are now sitting at 357.6 mmbbls, which is 6.2% above last year and 9.9% above the five-year average. 
·         Gasoline inventories fall more than expected – Gasoline inventories fell 2.6 mmbbls last week, compared with market expectations for a 0.8 mmbbls (per Bloomberg) withdrawal. Inventories of gasoline are now sitting at 207.7 mmbbls, which is 0.7% below last year and 3.3% above the five-year average.
·         Distillates draw less than expected – Inventories of distillates decreased 1.1 mmbbls last week, compared with market expectations for a 2.0 mmbbls withdrawal (per Bloomberg). Distillate inventories are now sitting at 158.8 mmbbls, which is 5.1% below last year but 16.2% above the five-year average.
·         Refinery utilization increases – Refinery utilization was up 1.6% last week to 84.0% which is 4.6% above last year and 1.3% below the five-year average.

Tuesday, November 16, 2010

Technical Trade Alerts - 11/16/2010

BULLISH ALERTS


Stochastic Cross: CAM CXO ESV SCCO TLM XEL

BEARISH ALERTS


21-Day/50-Day Moving Avg. Cross: NEE

Monday, November 15, 2010

Technical Trade Alerts - 11/15/2010

BULLISH ALERTS


10-day/21-Day Bullish Moving Avg. Cross: HAL NXY
MACD Cross: MDU OKE
Price Is Up >5% and Volume Is > 200%: BUCY JOYG
Bullish Up/Down Volume Ratio Slope Reversal: BUCY HK PXP XME

BEARISH ALERTS: None


Sunday, November 14, 2010

Technical Trade Alerts - 11/12/2010

Bullish Alerts


10-Day/21-Day Moving Abg. Cross:  CVX RIG
MACD Cross: NXY

Bearish Alerts


MACD Cross: TSL
Price Down > 10% and Volume Is > 200%: TSL
Stochastic Cross: CLB

Wednesday, November 10, 2010

Technical Trading Alerts 11/10/2010

BULLISH ALERTS:


10-Day/21-Day Moving Avg. Cross: ANR CVE OXY SU
MACD Cross: HAL

BEARISH ALERTS: None

Weekly DOE Natural Gas Storage Analysis 11/10/2010

Storage Levels Surpass Record
Injection slightly above expectations – The EIA reported a natural gas injection of 19 bcf, slightly below expectations (as per Bloomberg) of 24 bcf. For the comparable week, injections last year were 25 bcf with the five-year average injections at 30 bcf. Total storage now sits at 3,840 bcf, 0.8% above last year’s level of 3,809 bcf, and 9.8% above the five-year average of 3,498 bcf. 
Storage levels surpass record levels set in 2009 – The 19 bcf injection this week puts us above the record storage levels set in late November 2009. Looking ahead, the start of the winter drawdown season is upon us and below average temperatures are forecasted for most of the United States over the next week. 

Weekly DOE Crude & Product Inventory Analysis 11/10/2010


·         Crude draw higher than expected – Crude oil inventories decreased 3.3 mmbbls last week, much lower than market expectations for a 1.5 mmbbls build (per Bloomberg). Crude oil inventories are now sitting at 364.9 mmbbls, which is 8.1% above last year and 12.5% above the five-year average.                               
·         Gasoline inventories fall more than expected – Gasoline inventories fell 2.0 mmbbls last week, compared with market expectations for a 1.0 mmbbls draw (per Bloomberg). Inventories of gasoline are now sitting at 210.3 mmbbls, which is 0.2% below last year and 4.7% above the five-year average.        
·         Distillates see larger than expected draw – Inventories of distillates decreased 5.0 mmbbls last week, compared with market expectations for a 2.0 mmbbls draw (per Bloomberg). The draw on distillates due to higher demand may be a welcome sign of an improving economy in the U.S. Distillate inventories are now sitting at 159.9 mmbbls, which is 4.7% lower than last year and 16.2% above the five-year average.         
·         Refinery utilization increases slightly – Refinery utilization was up 0.6% last week to 82.4% which is 2.5% above last year and 2.7% below the five-year average.

Tuesday, November 9, 2010

Exxon Stays Firm on Natural-Gas Bet - WSJ.com

Exxon Stays Firm on Natural-Gas Bet - WSJ.com

Technical Trade Alerts - 11/9/2010

BULLISH ALERTS:


10-Day/21-Day Moving Avg. Cross: ATLS COG CRK CRZO DNR FLR FST FWLT PVA PXD WFT WLL

MACD Cross ANR APL COP HK RIG

Price Is Up > 5% and Volume Is > 200%: APL ATLS CRZO EQT MDR NFG

Up/Down Volume Ratio Reversal: CVX ECA SU

BEARISH ALERTS


Stochastic Cross: CLB

Weekly Coal Review 11/10/2010

Power generation totaled 70.3k GWh last week, up 1.5% YoY with Heating Degree Days registering 43 days, 7 less than last year while Cooling Degree Days came in at 13 days, 4 better than last year. Weekly coal shipments totaled 20.4 mln tons (+4.2% YoY). Citigroup estimates that coal stockpiles rose 1 mln tons WoW and now stand at 166-168 mln tons. According to Platts' survey, physical PRB declined $0.20/ton to $13.20/ton while other basins stayed steady.

Thursday, November 4, 2010

Technical Trade Alerts - 11/4/2010

Bullish Alerts:
10 Day/21-Day Moving Avg. Cross: E IVN  PXP SWN USO VALE VLO XME XOP

MACD Cross: APA BEXP CAM CHK COG CVE DNR DRQ DVN E ESV FST HP JEC NE NFG NFX OIH OXY PDE PWE RIO SGY SU TS VLO WFT XLE XME XOP

Price Is Up> 5% and Volume Is >200%: APA BHP CSIQ CXO DNR SU

Up/Down Volume Ratio Slope Reversal: ATLS BBL CF EMN JOYG

Bearish Alerts: None

Weekly DOE Natural Gas Storage Analysis

Storage levels inch closer to 2009 highs
Injection slightly above expectations – The EIA reported a natural gas injection of 67 bcf, slightly above expectations (as per Bloomberg) of 64 bcf. For the comparable week, injections last year were 29 bcf with the five-year average injections at 26 bcf. Total storage now sits at 3,821 bcf, 1% above last year’s level of 3,784 bcf, and 10% above the five-year average of 3,468 bcf. 
Storage levels inch closer to record levels set in 2009 – The 67 bcf injection this week puts us only 16 bcf below record storage levels set in late November 2009. Looking ahead, above average temperatures forecasted for the eastern consuming regions should dominate the below average temperatures forecasted for the western consuming regions. As a result, next week’s storage numbers may indeed surpass the all time natural gas storage record set in 2009.

Technical Trading Alerts 11/3/2010

Bullish Alerts:
10 Day/21 Day Moving Avg. Cross: CXO XCO
MACD Cross: BHP BP CBI CNQ ERF FTI HES TOT USO
Price Up > 5% and Volume > 200%: CLNE
Up/Down Volume Ratio Slope reversal: CLNE ERF WLT

Bearish Alerts: None


Wednesday, November 3, 2010

Weekly DOE Crude & Product Inventory Analysis

Crude rises on larger than expected build

·         Crude build slightly above expectations – Crude oil inventories increased 2.0 mmbbls last week, above market expectations for a 1.5 mmbbls build (per Bloomberg). Crude oil inventories are now sitting at 368.2 mmbbls, which is 9.6% above last year and 13.8% above the five-year average. 
·         Gasoline inventories drawn more than expected– Gasoline inventories fell 2.7 mmbbls last week, compared with market expectations for inventories to remain unchanged (per Bloomberg). Inventories of gasoline are now sitting at 212.3 mmbbls, which is 1.9% above last year and 5.7% above the five-year average.
·         Distillates see larger draw than expected – Inventories of distillates decreased 3.6 mmbbls last week, compared with market expectations for a 1.0 mmbbls draw (per Bloomberg). Distillate inventories are now sitting at 164.9 mmbbls, which is 1.5% lower than last year and 19.5% above the five-year average.
·         Refinery utilization shows a slight decline– Refinery utilization fell 1.9% last week to 81.8% which is 1.2% above last year and 3.0% below the five-year average.

Technical Trading Alerts 11/2/2010

Bullish Alert

10-day/21-Day Moving Avg. Cross: BEXP JRCC KBR RRC
MACD Cross: BBL CCJ CLR CXO MDR PVA PXP RS SWN TLM UPL XOM
Price Is Up>5% and Volume Is>t; 200%: None
Stochastic Cross: COP CVX
Up/Down Volume Ratio Slope reversal: JRCC TLM TOT XLB

Bearish Alerts: None

Near Resistance:
Oil Field Services DO GLBL IO PDC TTI
E & P ATPG BEXP COG CPE CRK CRT ENP HK KWK PQ SD
Integrated/Refiners ALJ FTO ROC VLO WNR
Mid-Stream/Tankers AGL CPLP NAT SGU TLP XTXI
Coal & Mining CMC FCX
Alternative Energy APWR ASTI CSIQ DSTI FAN HOKU KWT LDK PBW SPIR SPWRA TAN WFR
E & C EME

Over Resistance:
Oil Field Services HERO PDS TS
E & P DNR FST GMXR TLM UNG UPL
Integrated/Refiners E STO
Mid-Stream/Tankers APL DHT FRO SFL TNK
Coal & Mining ANR CENX JOYG PCX STLD TCK USU
Alternative Energy TSL YGE
E & C MDR SHAW

Near Support
Oil Field Services
E & P
Integrated/Refiners
Mid-Stream/Tankers
Coal & Mining
Alternative Energy
E & C

Under Support
Oil Field Services
E & P
Integrated/Refiners
Mid-Stream/Tankers
Coal/Mining/Metals
Alternative Energy
E & C

Tuesday, November 2, 2010

XCO's Management Valuation

It appears that the management is trying to buy the company at the low end of the valuation they presented to the public in July 2010. Please see pages 7-8 in Investor Meeting Slides, which shows the valuation range to be $25.43-$36.94 with a mid-point of $31. I am long XCO.

Monday, November 1, 2010

Technical Trading Alerts 11/1/2010

Bullish Alert

10-day/21-Day Moving Avg. Cross: FRO
MACD Cross: BTU KBR RRC URS XCO
Price Is Up>5% and Volume Is > 200%: XCO
Stochastic Cross: SPN XOP

Bearish Alerts:

21-Day/50-Day Moving Avg. Cross: SHAW
Stochastic Cross: PBR
Up/Down Volume ratio reversal: CLB

Near Resistance:
Oil Field Services GLBL HERO IO PDC RDC TS TTI
E & P ATPG BEXP CPE CRT ENP FST GMXR PQ SD TLM UPL WTI
Integrated/Refiners E FTO STO WNR
Mid-Stream/Tankers AGL CPLP DHT SGU TLP TNK XTXI
Coal & Mining JOYG TCK
Alternative Energy APWR ASTI DSTI FAN FEED HOKU KWT LDK PBW SPIR SPWRA TAN TSL YGE
E & C MDR SHAW

Over Resistance:
Oil Field Services PDS
E & P CRK DNR HK PXE RRC UNG
Integrated/Refiners REP TOT
Mid-Stream/Tankers APL FRO MMLP RGNC SFL
Coal & Mining ANR CENX PCX USU
Alternative Energy None
E & C None

Near Support
Oil Field Services BAS DTE ENG FTK GLBL HLX OIS PDC PKD RIG
E & P BEXP BTE DNR DPTR EP FCG GMXR KWK NXY OIL SD TLM USO VNR WMB
Integrated/Refiners BP HOC SNP WNR
Mid-Stream/Tankers ATO CPLP DHT GEL GLP KMR NGLS NJR PNY SFL SGU SUG XTXI
Coal & Mining AA ANR IMN IVN KOL PCX RIO SCCO TCK TIE USU
Alternative Energy HOKU KWT MGPI SMG WFR
E & C CBI EME ENG MDR SHAW URS

Under Support
Oil Field Services CPX IO NE TTI TTEK WFT
E & P BBG CPE CVE REXX WTI
Integrated/Refiners ALJ DOW SU VLO
Mid-Stream/Tankers CLMT CPNO DEP NAT SPH TRP
Coal/Mining/Metals NUE
Alternative Energy LDK PBW PZD TAN
E & C None

Who Is Next After EXCO?

EXCO (XCO) has received a $20.50/share offer from its management. XCO has interest in two of hottest natural gas plays in the U.S.: The Haynesville Shale and the Marcellus Shale. Below is a list of companies also involved in these hot E&P plays. They are performing real well this morning on hopes that bids may develop for them:

Haynesville Shale:
CHK HK SWN GMXR CRK GDP SM FST EOG

Marcellus Shale:
CHK EOG RRC PVA SWN COG EQT