Kevin's Market Blog: Oil Prices Surge

Tuesday, January 30, 2007

Oil Prices Surge

If you've been reading this blog for the past four weeks you would know that I've been bullish on commodity related stocks such as gold,steel and oil. The reasons are mainly seasonal and cyclical. You could read some of my past comments here
I've been patiently waiting to buy more oil stocks and today was the day I added to some of my existing long positions because crude oil was up strongly this morning and kept moving higher throughout the day. Crude Oil closed up almost three dollars today in the March contract.

The three oil groups I follow are XNG, XOI and OSX which can be seen in the above chart. Notice from the January 10th low how the XNG appears to be the strongest out of the three oil groups. XNG (natural gas index) are the stocks I bought today and as you can see in the chart XNG is the first to breakout and make a new high for the month. I'm sure the others will follow but I always try to position myself in the strongest stocks in the strongest group. Some of the strong natural gas stocks today were APA, EOG and DVN. I like CVX in the XOI index. Keep in mind tomorrow HES reports earnings before the open but I don't think that should be a problem. We'll see what happens.

2 comments:

NA said...: K-

You should also look at XOM. Very good earnings, which are stable, for a cyclical and volatile business.

No wonder it has some of the best inst. sponsorship and is a solid stock, fundamentally and technically.; 5:05 AM
NA said...: Also- what do you think about OIH?

I think thats a good ETF to day/swing trade. During my JPM internship, energy traders would go long/short it, depending on the thesis, with the Crude Oil or NG futures.

Its got good liquidity, not to mention, solid Oil and integrated names. What say you?; 5:07 AM