Monday, August 31, 2009
Both the above image and the SYNOPSIS + OUTLOOK are reprinted with permission from PROMETHEUS MARKET INSIGHT Weekly Review. Its produced by a pretty smart guy who has a different take and timeframe on things than I do, and I like his stuff. Its not for short term trading,but one of the few people out there that wont kill you with words or leave you more confused than you started.
You can access his site at "www.prometheusmi.com, and off my link sidebar.
Oil closed slightly lower this week, holding near recent highs of the uptrend from early 2009. A double top may be in the process of forming, and unless prices can move appreciably above the recent high near $74 a reversal will become more likely.
A close well above current levels would reconfirm the uptrend from February and predict additional gains, while a break below uptrend support near $72 would forecast a retest of nearby congestion support at $60. Both scenarios remain equally likely. "
Have fun, I am liking this dip as a short term buying spree, but please observe your stops and limits, as we dont know how long any upside might last.
If I failed to mention it, Advantatge Energy [ AAV ]looks like its on its own trip, after converting from a trust to a straight corporate structure. DYODD, maybe it will be featured in a future issue for subscribers.
Lets look at the Canadian Oil Patch. I picked up FEL.To 8/26 after a lengthy analysis and a lot of strategic and tactical considerations. I noticed the pinching together of the 20 & 50 DMA's, plus the short term Rating was 6.75 of 10, whereas in the current case, the score of AXL.To is 6.6. Both were way behind CLL.To, and PVE.Un or as the Americans say, PVX.
If we already didnt know, its come down to a schism btwn the have's and have not's as to finance and access to funds. Apparently the market is not only choosing whom they think is going to survive and prosper, but whoms else they think is shark bait.
The other issue here, is many of these smaller PRODUCERS are gas laden. Which no longer means they should go down, even if gas is hovering above some very low numbers. Drilling and capping off for future production is going to take a back seat to producing revenues, so that kind of thing will stop. Frac'ing is going to hell in a handbasket when they get thru regulating it, as it raises hell with ground water, no if's, and's or but's, and it will slow down considerable, from what I read on the public interest websites like Publica.org. If you doubt there is a future for gas producers, consult the NatGas index $XNG and you will see the producer stock prices turn up before the commodity prices.
So there is a little heads up for those trading NAT GAS stocks, and some of the Canadian readers checking out Energy Patch speculations. ONR.To, FEL.To, AXL.To, NGL.To, PVX and others are of note.