Weekly Update: June 18, 2014

| June 18, 2014

Weekly Update: June 18, 2014

 

Big Picture Outlook:

Precious metals are coming into the spotlight today as Fed Chairwoman Janet Yellen talks to the press.

As you may already know, the Fed cut another $10 billion a month of quantitative easing in their regularly scheduled FOMC meeting. What’s more, they kept to their policy of keeping interest rates low for the foreseeable future.

How are gold and silver reacting?

Gold is up $1.80 an ounce while silver is up a meager 10 cents. Needless to say, precious metal investors are yawning at the news.

However, the same cannot be said for gold and silver miners…

The Market Vectors Gold Miners ETF (GDX) is up just over 2% while the Global X Silver Miners ETF (SIL) is up 1.95% as I write. Given today’s bullish reaction in miners, we’ll be taking a very close look at this industry in coming weeks.

For now, let’s get to our open position updates…

 

Portfolio Recap:

. . . . Encana (ECA) July 18, 2014 $19.00 Calls

ECA is the gift that keeps on giving! Shares of the Canadian producer are surging to new 52-week highs this week. This week’s rally has our July $19 calls showing a gain of just over 250%. If you’re still holding a few of these contracts, I would just keep doing so. There’s no telling how high ECA can run by expiration next month!

Remember, both our profit targets have already triggered in this trade. That’s why only aggressive investors should be holding a few of their original call contracts for higher prices.

. . . . Abraxas Petroleum (AXAS) June 20, 2014 $2.50 Calls

More upside for AXAS! The small-cap producer jumped to the $5.60 area this morning before pulling back in afternoon trading.

Now listen closely…

Our call contracts expire on Friday. As a result, I recommend you sell to close this entire position. If you don’t sell these contracts by Friday afternoon, you will end up owning AXAS shares at $2.50 on Monday.

This position is now officially closed. Congratulations on a great trade!

. . . . Goodrich Petroleum (GDP) June 20, 2014 $17.50 Calls

This is expiration week for our GDP trade as well. As a result, you’ll need to sell to close your entire call position by Friday. If you don’t, you’ll own GDP shares at $17.50.

As you know, this trade is the biggest gainer in our portfolio (so far). In fact, we achieved a peak gain of 781% in yesterday’s session. As of today, you can still sell your calls for $10.60 per contract.

Now that’s what I call a home run!

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

SE hit our first profit target of $42 on Monday! The early week rally sent our call contracts trading up to $3.10 a contract- a gain of 158%. If you’re a conservative investor, you may want to take some profits off the table in this trade (if you haven’t already).

Now remember…

We still have plenty of time until expiration. That’s why aggressive traders may want to hold these calls for our second profit target at $44.

. . . . Cliffs Natural Resources (CLF) June 20, 2014 $17 Puts

Here’s another trade we need to close this week. As you know, both our profit targets triggered in this trade, which means you should have taken home some nice profits. Speaking of profits, these CLF puts jumped to a peak gain of 260% last week!

This position is officially closed. Congratulations on yet another great trade!

. . . . PDC Energy (PDCE) June 20, 2014 $70 Calls

This one is coming down to the wire. PDCE is flirting with $70 a share as I write this afternoon. However, since our calls expire in two days nearly all the time value has melted away. As a result, PDCE will need to rally over $72.20 ($70 strike + $2.20 call purchase price) by Friday to get these contracts back to breakeven.

What should you do?

First of all, only aggressive and experienced traders should be holding these calls right now. If that’s you, decide if you want to sell these contracts for the value they have left or let them ride until Friday afternoon.

Whatever you decide to do, just remember that if PDCE closes the week above $70 you’ll need to sell these contracts by the closing bell on Friday afternoon. If you don’t, you’ll end up owning PDCE at $70 per share!

. . . . PetroQuest Energy (PQ) July 18, 2014 $6 Calls

PQ is off to the races! The small-cap oil producer is flirting with our first price target ($7) in late trading today. If you’re a conservative trader, consider peeling some profits off on this trade tomorrow. Speaking of profits, our calls are selling at $1.00 in late day trading. That’s a 66% gain from our entry.

If you’re aggressive, keep holding for our second profit target at $8!

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

BWP has decided to linger around the $17.50 area for a while. But since we have plenty of time until expiration, let’s just be patient.

Keep holding this pipeline provider for higher prices in the months to come. Our profit targets are at $20 and $24.

. . . . Petroleo Brasileiro (PBR) July 18, 2014 $16 Calls

PBR is closing near $16.00 in today’s session. I have a feeling we’re going to see a substantial run higher in the near future for this Brazilian oil producer!

Remember, our profit targets are at $17.50 and $19.00.

. . . . Cabot Oil & Gas (COG) July 18, 2014 $37.50 Calls

So far, COG is turning out to be a dud. Shares of the Utica producer are still stuck in the $35 area.

Remember, our risk control line triggered in this trade. That means only aggressive traders should be holding these calls for a rebound.

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

HK screamed to new 52-week highs over $7 in yesterday’s session. The rally sent our $7 calls up to $0.75 a contract- a gain of 36% from our purchase price of $0.55.

We have plenty of time left in this trade. Keep holding your HK $7 calls for higher prices. Remember, our profit targets are $7.50 and $10.00.

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

TPLM is achieving new 52-week highs today. Shares of the Bakken producer shot to $11.75 in the first few minutes of the day. The rally sent our $10 calls running to $2.05 a contract- a 51% gain from our entry price of $1.35.

Remember, we have plenty of time in this trade. Keep holding for our profit targets at $12 and $14!

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

Our most recent trade is on the verge of a technical breakout. If CNP rises above $24.85 on strong volume this week, the odds grow for a big run to higher prices in the near future!

Keep holding for your CNP calls for higher prices. Our profit targets are at $28 and $35.

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 a line at [email protected]

 

Category: Commodity Trading