Weekly Update: August 13, 2014

| August 13, 2014

Weekly Update: August 13, 2014

 

Big Picture Outlook:

The price of West Texas Intermediate (WTI) just can’t seem to find a bid in recent trading. Investors seem content with keeping the commodity around the $97 area until they receive the information they need to push it higher.

But keep in mind…

Crude is oversold on a short-term basis, which means a bounce to the $100 area is likely. However, if crude crumbles below $95 in the near future, we could see a washout to the $90 area.

Let’s get to our open position updates…

 

Portfolio Recap: 

. . . . Spectra Energy (SE) September 19, 2014 $39 Calls

SE is still trying to recover from that nasty downturn the last week of July. Shares of the natural gas pipeline operator are trading just north of $40 a share in today’s session.

We have another month until expiration in this trade, so aggressive traders may want to keep holding for a potential rebound.

Remember, SE already hit our first profit target of $42 in June. That means conservative traders may have already booked hefty profits in this trade.

. . . . Boardwalk Pipeline Partners (BWP) Sept. 19, 2014 $16 Calls

Investors pushed BWP to $20 a share early yesterday morning after hearing CNBC’s Jim Cramer paint the pipeline provider as a potential buyout target. While I doubt a takeover will happen by option expiration next month, we may see additional gains for BWP as speculators accumulate the stock. Aggressive investors should consider holding their remaining BWP calls for our second profit target at $24.

. . . . Halcon Resources (HK) October 17, 2014 $7 Calls

Still no word from HK on their Tuscaloosa Marine Shale (TMS) well…

No doubt about it, the results of their first TMS well, the Blackstone 4H-2, are highly anticipated. Unfortunately, the longer HK delays the results, the lower their share price will likely go.

Remember, HK already hit our first profit target of $7.50. As a result, only aggressive investors should be holding HK for the well results and potential bounce.

. . . . Triangle Petroleum (TPLM) October 17, 2014 $10 Calls

TPLM has done nothing but chop around the $11 area since we spoke last week. However, there’s still plenty of bullish potential left in this Bakken player. Let’s keep holding TPLM for a potential rebound in oil prices and more news regarding the sale of Rockpile.

Remember, our first target of $12 has already triggered. As a result, only aggressive investors should be holding TPLM calls for higher prices.

. . . . CenterPoint Energy (CNP) August 15, 2014 $25 Calls

Unfortunately, we’re nearing the end of our CNP trade. Expiration is this Friday. In spite of the massive call buying we saw in the early stages of this trade, CNP just couldn’t put a solid bullish run together.

However, even though CNP didn’t hit our price targets at $28 and $35, our call contracts ran to a 100% gain in late June.

. . . . Hecla Mining (HL) September 19, 2014 $3.50 Calls

HL is flirting with another breakout. The silver miner is slowly working its way back toward technical resistance at the $3.40- $3.50 area. If HL can break above that area on high volume, we’ll be in good shape with our calls.

Remember, our profit targets are $4 and $5.50.

. . . . Pan American Silver (PAAS) October 17, 2014 $16 Calls

PAAS is rallying towards recent highs in the $15.50 area. If the silver miner can surprise Wall Street with better than expected earnings in today’s post market release, we could see PAAS surpass $16 in short order.

Keep holding your PAAS calls for higher prices. Our targets are at $17 and $20.

. . . . SandRidge Energy (SD) December 19, 2014 $7 Calls

Well folks, SD has officially fallen out of bed…

The mid-continent oil and gas explorer reported earnings well below analyst estimates last week. As a result, investors sent shares plummeting towards 2013 lows at $5.

This is the perfect example of why it’s so important to pay attention to the risk control line issued with each trade. As you may remember, conservative investors should have closed this position when it crossed below $6.60 in mid-July.

If you’re an aggressive trader and still holding your SD calls, consider sticking with it for a while longer. SD shares are deeply oversold and may see a rebound in the near future.

. . . . Southwestern Energy (SWN) September 19, 2014 $43 Calls

While SWN was able to tack on slight gains today, it’s been a downhill slide for the past week. Remember, SWN hit our risk control line at $40.85 in late July. That means only aggressive traders should keep holding SWN for a potential rebound.

. . . . Noble Energy (NBL) September 19, 2014 $72.50 Calls

Bulls are doing their best to push NBL back above the 200-day moving average near $70. If the international oil producer can surpass this important technical hurdle, it will have a clear shot at our $73 profit target.

Aggressive traders should keep holding their NBL calls for higher prices.

. . . . Valero Energy (VLO) September 19, 2014 $52.50 Calls

VLO is within a whisker of a major break to higher prices. If the refiner can surpass technical resistance at the $52 area, it will have a clear path to our first profit target at $54.

What’s more, there’s been a ton of additional call buying in the September 2014 $52.50 calls in recent trading. That’s a great sign we’re on the right track with this trade.

Keep holding your VLO calls for additional gains!

. . . . Synergy Resources (SYRG) September 19, 2014 $12.50 Calls

SYRG is flirting with a breakout at the $13 area. Should we see a rebound in oil prices, this small-cap player has a very good chance of achieving our first profit target at $14.

Remember, there was a ton a bullish call buying in this name last week, which puts the odds of additional gains heavily in our favor.

Keep holding your SYRG calls for higher prices.

Until next time,

Justin Bennett

Remember, if you’d like to comment on how you’re doing in the service, or if you have any questions or concerns, please feel free to drop me an email at [email protected]. I’d like to know how you’re doing!

 

Category: Commodity Trading

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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