Buy Alert: June 10, 2014

| June 10, 2014

Buy Alert: June 10, 2014

 

Option Strategy:

Buy Triangle Petroleum (TPLM) October 17, 2014 $10.00 calls for $1.40 or better.

 

Commodity Outlook: Crude Oil

WTI crude went on a bullish rampage yesterday…

The US oil benchmark rose $1.75 a barrel to close at $104.54. Given the current bullish market sentiment, it’s increasingly likely WTI will break above technical resistance at $105 over the next few weeks.

If and when it does, the odds grow tremendously for a run to the $108 area or higher this Summer.

Here’s a company that will benefit immensely from higher oil prices…

 

Resource Company: Triangle Petroleum (TPLM)

TPLM is a Denver, Colorado based oil and gas producer whose sole focus in the Bakken Shale of North Dakota and Montana.

The company holds just over 130,000 net acres in the two states, giving it 46.5 MMBoe of proven reserves. What’s more, production is growing by around 300% year-over-year… an astounding growth rate.

And listen to this…

TPLM just released quarterly earnings last night. Results beat analyst’ expectations with earnings of $0.15 a share on revenue of $99.8 million.

Given the current bullishness in WTI, along with excellent quarterly results, there are very good odds of TPLM continuing higher in coming months.

So here’s what we’ll do…

Let’s purchase the TPLM October 17, 2014 $10.00 calls for $1.40 or better.

The current bid/ask spread for this contract is $1.20/$1.35.

Do not pay more than $1.40 per contract!

Our official entry price for performance tracking is $1.35. Your price may be higher or lower.

Exit Strategy:

Triangle Petroleum

Remember, we want TPLM to trade higher. Our first profit target is $12.00, which is just above the all-time high at $11.50. We could see additional gains for TPLM if crude oil runs to $108 a barrel this Summer. In such a scenario, TPLM may jump to our second profit target at $14.00.

The risk control price for this trade is $9.45. If TPLM trades below that level, conservative investors should consider closing this trade to conserve capital.

 

Category: Commodity Trading