Technical Trading Alerts 10/28/2010

Bullish Alerts:

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

MACD Cross: CAM IOC XEC

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 71 bcf, slightly below expectations (as per Bloomberg) of 74 bcf. For the comparable week, injections last year were 25 bcf with the five-year average injections at 45 bcf. Total storage now sits at 3,754 bcf, only 0.1% below last year’s level of 3,756 bcf, and 9.1% above the five-year average of 3,442 bcf.

Storage levels inch closer to record levels set in 2009 – The 71 bcf injection this week puts us only 83 bcf below record storage levels set in late November 2009. Looking ahead, above average temperatures forecasted for key consuming regions means we could potentially reach new highs in the coming weeks.

Technical Trading Alerts 10/27/2010

Bullish Alerts:

MACD Cross: HOS LINE OII SPN

Price Is Up > 5% & the Volume is > 200%: NBR OII

Stochastic Cross: CHK CRK DVN EOG FST RIG

STR WMB

Bullish Up/Down Vol. Ratio Slope Reversal: BTU LINE NOV OII VLO

Bearish Alerts: None

Technical Trading Alerts 10/26/2010

Bullish Alerts:

10-Day/21-Day Moving Avg. Cross: FSLR

MACD Cross: MOS NOV

Price Up More Than 5% and Volume Greater Than 200%: NOV

Stochastic Cross: APA ATLS BP HP NE

Bearish Alerts: None

NuStar Trumps Expectations - Yahoo! Finance

NuStar Trumps Expectations - Yahoo! Finance

Trade Entry -MEE Risk Reversal Option Play

Last week, Wall Street Journal reported that Massey Energy (MEE) is exploring strategic alternatives including the sale of the company. This morning, Stiffel Nicalaus published a research piece stating that Cliffs Natural Resources (CLF) may bid for MEE and the bid could be as high as $62. So far the stock has hit a 52-week low of $25.85 and 52-week high of $54.80. Massey shares nosedived following the April 5 explosion at its Upper Big Branch mine in West Virginia, which killed 29 miners. It closed at $54.69 that day and hit a low of $26.31 on July 2. The WSJ article mentioned that MEE could be in due diligence phase of a strategic move as early as November.

Today, I initiated a costless risk reversal spread to take advantage of the expected sale of MEE:

Trade Details Cost Basis

Sell 2 contracts of MEE 2010 DEC 32.00 PUT @ $0.40 ($80.00)

Buy 1 contract of MEE 2010 DEC 50.00 CALL @ $0.75 $75.00

Total Cost ($5.00) (credit)

Breakeven Price: $31.97

As long as I am willing to buy the stock at $30 (in case there is no deal), this spread provides me $5 credit initially and unlimited upside should MEE's price exceeds $50 by December 18, 2010. Statistically, there is about 7.6% probability of MEE's price being $32 or lower by the expiration date. So, I am willing to take the risk of buying the stock at this price. Also, this price level corresponds to the congestion area from which the price broke up indicating good support at this level. One thing to remember is that one would have to post margin for the Put side of the spread or cash-back the short puts ($6,400 less $5 credit).

Technical Trading Alerts 10/25/2010

Bullish Alerts:

MACD Cross: APC FSLR NBR SLB

Price Up > 5% & Volume > 200%: APC

Stochastic Cross: MMR

Up/Down Volume Ratio Slope Reversal: APC ATLS CCJ

Bearish Alerts: None