600% Return? I’m Not Exaggerating!
The oil and gas industry is on fire right now…
Stocks in the industry are outperforming the broad markets by a wide margin. As a matter of fact, the SPDR S&P Oil & Gas Exploration & Production (XOP) is up a hefty 12% year-to-date while the DOW, Nasdaq, and S&P 500 are still hovering around the breakeven point.
Let me show you…
As you can see, the XOP (blue line) started separating from the pack in early April. And over the past few weeks, the ETF has made a near parabolic move to the upside. The XOP holds a bevy of oil and gas exploration stocks like Goodrich Petroleum (GDP), Comstock Resources (CRK), and Halcon Resources (HK).
Why are bulls so focused on this industry?
First of all, the Ukraine crisis is doing a lot to keep oil prices elevated. In fact, this is the first year since 2011 where oil prices have been above $100 a barrel during the month of April. Clearly, geopolitical tensions are keeping a hefty premium in crude.
Obviously, the higher oil prices are, the better the bottom line is for companies that bring it out of the ground.
But higher crude is only part of the reason oil stocks are performing so well…
Investors are finding many of the companies in this industry are having great success finding new oil and gas reserves under US soil.
Case in point, Goodrich Petroleum (GDP) recently announced they hit oil in the Tuscaloosa Marine Shale (TMS) of Louisiana. The Houston, Texas based company announced their newly completed well achieved peak production of 1,270 barrels of oil equivalent per day.
Take a look at what the news did for GDP shares…
Investors sent GDP soaring 33% on April 14th and are continuing to push the name higher in recent trading. As you can see, one good well can make a huge difference in an oil explorer’s share price.
Of course, GDP isn’t the only oil and gas stock shooting higher…
Abraxas Petroleum (AXAS) went on a bullish rampage of its own in April. Shares of the small-cap oil explorer are up 31% since the first of the month. And that’s on top of 23% gains achieved in March.
See for yourself…
Investors are rewarding AXAS shares since the company is increasing production, divesting certain assets, and increasing capital expenditures for full year 2014.
Wouldn’t it be nice to profit from this outperformance in the oil and gas industry?
It just so happens that subscribers to my flagship options service, the Options Profit Pipeline, were rewarded mightily with the bullish moves in GDP, AXAS, and a handful of other oil names.
In case you’re unaware, the Options Profit Pipeline focuses specifically on commodities and the companies producing them.
The idea behind the service is simple. We buy call options in natural resources companies we think are about to jump higher, and buy puts in names we think are ready to trade lower.
Speaking of jumping higher….
Our GDP call option trade collected gains as high as 611%.
Our AXAS calls achieved profits as high as 160%.
Some other top performers in the Options Profit Pipeline in recent weeks are Conoco Phillips (COP), Encana (ECA), and BP (BP). These trades achieved gains of 260%, 183%, and 197% respectively.
If you’d like to discover how to achieve rapid profits in commodities and the companies that produce them, don’t hesitate in joining us.
My next trade is coming out this week!
Until Next Time,
Justin Bennett
Category: Commodity Trading
