Weekly Update: August 6, 2014

| August 6, 2014

Weekly Update: August 6, 2014

 

Big Picture Outlook:

Geopolitical tensions are running high again. Reports from various news feeds reveal Russia is massing around 45,000 troops on the Eastern Ukraine border.

It’s hard to be sure, but it sounds like Russia is once again ready to invade their western neighbor.

If they do, you can bet your bottom dollar that market volatility is going to explode.

Since the situation leaves so many unanswered questions, it’s likely investors go into “risk off” mode until there’s more clarity. In these scenarios, stocks will likely get dumped in favor of “safe haven” assets like the US Dollar and gold.

Now let me be clear…

Despite this looming uncertainty, it’s wise to stick to your guns in our open trades. As you know, our open positions are correlated with movements in oil, gold, and silver.   These commodities should perform the best should Russia actually do the unthinkable.

Let’s get to our open position updates…

 

Portfolio Recap: 

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

SE was hit hard over the past few days. The pipeline operator sank from $43 all the way down to the current trading action near $40. Obviously, the downturn is decreasing the value of our calls.

But remember, our first profit target at $42 was triggered weeks ago. That means only aggressive traders were hanging on to SE for higher prices.

No matter what your risk tolerance is, don’t let these SE calls trade below our initial buy price of $1.20.

Never let a winning trade turn into a loser!

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

BWP reported outstanding Q2 earnings on Monday morning. Thanks to the solid results, BWP surged to our $20 profit target. That means you should have been able to collect gains of around 130% on these $16 calls.

If you’re aggressive, keep holding a few contracts for the potential of higher prices.

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

HK reported solid earnings last week. In fact, Q2 revenue and earnings were above analysts’ estimates.

However…

HK is delaying the results of their first TMS well. When an oil company delays well results, it’s usually not a good sign. Investors acted appropriately in recent sessions by selling HK.

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

Triangle is all over the map!

The Bakken producer fell along with the rest of the exploration and production industry late last week. But on Monday, the company announced they’re seeking an advisor for the sale of their Rockpile Energy Services subsidiary.

Analysts peg the value of Rockpile at around $570 million. If Triangle can get that price, it will be a major catalyst for a higher TPLM share price!

Remember, our first target of $12 has already triggered. But the potential sale of Rockpile puts our second TPLM target at $14 well within reach! We have plenty of time left here, so if you’re aggressive, keep holding your TPLM calls for higher prices.

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

Unfortunately, the bottom has fallen out of CNP. As a result, our $25 calls have very little value left. With expiration right around the corner, I suggest you hold onto any calls you have left, just in case CNP pulls through with a miraculous rebound.

Remember, even though CNP didn’t hit our price targets at $28 and $35, our call contracts ran to a 100% gain in late June. That means some traders may have already taken a profit.

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

Another week of choppy trading for HL…

However, the silver miner did make a promising 4% move higher today in response to the Ukraine news. We still have time for HL to make the move we need so keep holding your calls for higher prices.

Our profit targets are $4 and $5.50.

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

Much like HL, PAAS made a promising move higher in today’s session. The international silver miner is bouncing higher after hitting technical support near $14.25 in yesterday’s session.

If Russian invades Ukraine, it should send silver, and PAAS, dramatically higher.

Keep holding your PAAS calls for a rebound. Our targets are at $17 and $20.

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

Unfortunately, sellers have overtaken SD. The only thing that can turn this around is strong earnings results after the close today.

Remember, SD hit our risk control line at $6.60 a few weeks ago. As a result, only aggressive investors should be holding their SD calls for a rebound.

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

Still no luck for SWN bulls…

The natural gas producer seems intent on continuing the downtrend that started in mid-June. Remember, SWN hit our risk control line at $40.85 in recent trading.

That means only aggressive traders should keep holding SWN for a potential rebound.

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

Wow. What a week for NBL. After hitting our risk control line at $66.50 last week, the international oil and gas producer exploded higher in Monday’s session.

What caused the spike?

Apparently, an anti-fracking initiative was taken off an upcoming Colorado ballot. Obviously, this is great news for Colorado based oil and gas names like NBL.

NBL surged to an intraday high of $72.85 on Monday, which sent our $72.50 calls up to $2.05 a contract- a 105% gain.

No doubt about it, the volatility in NBL has been intense over the past week. If you’re still in this trade, keep holding your calls for higher prices. Our profit targets are at $73 and $76.

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

VLO is on the move!

The oil refiner jumped $1.66 a share (3.3%) in today’s session after the EIA reported a big drawdown in gasoline inventories. What’s more, Brent crude gained on the day while WTI bled below $97 a barrel.

Keep holding your VLO calls for higher prices. Our targets are at $54 and $57.

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

In spite of the surge in market volatility over the past two trading days, SYRG remains in a strong short-term uptrend. While it’s not out of the question to see a slight pullback in coming days, the bullish options action in yesterday’s session foretells even higher prices for SYRG.

Keep holding your calls for additional gains. Our targets are at $14 and $15.

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.