Weekly Update: March 18, 2015
Weekly Update: March 18, 2015
Big Picture Outlook:
No doubt about it, it was an undeniably bearish week for WTI crude. The commodity fell to new 2015 lows at $42.50 in this morning’s trading session. Bulls were nowhere to be found the past few days as investors became increasingly concerned over quickly rising US crude storage levels.
In fact, this morning’s EIA update revealed another huge build of 9.6 million barrels for the week of March 13th. That’s the 10th straight weekly inventory addition- all of which were exceptionally large.
But just when it looked like crude was ready to dive lower this afternoon, the Federal Reserve released their FOMC statement…
The US central bank signaled that while they’ll likely start raising interest rates soon, the pace of rate increases will be slower than anticipated.
The news sent the US Dollar sharply lower, which in turn, sent crude and other commodities rallying strongly into the close.
If we get continued weakness in the greenback the next few weeks, we’re likely in store for some strong bullish reversals in various commodities.
Let’s get to this week’s updates…
Portfolio Highlights:
Editor’s Note: I won’t update every open position every update. I focus on the positions with significant news or price movement.
. . . . Exxon Mobil (XOM) March 20, 2015 $90 calls
I have to admit, I’m quite surprised nothing has come of this trade yet. After seeing a $2 million short-term bet placed on XOM calls a few weeks ago, I was certain we’d see some unexpected bullish news out of the company by now.
But it hasn’t happened yet.
We have just a few more days until expiration so aggressive traders may as well just keep holding whatever calls they have left.
. . . . EOG Resources (EOG) April 17, 2015 $95 calls
After a quick dip to $85 last Friday, EOG is exploding to new weekly highs in today’s session. As I write, the top-tier shale explorer is up 4% to trade at just over $90 a share.
If you’re still in this trade, keep holding your calls for further upside!
Our profit targets are $95 and $97.
. . . . Oasis Petroleum (OAS) May 15, 2015 $15 calls
Here’s another shale explorer that’s making big strides today. OAS is up nearly 8% as I write to trade back over $14 a share. No doubt about it, today’s bullish action is a very good sign!
Our risk control line was not hit, so everyone should still be holding the May $15 calls for further upside.
Our profit targets are at $18 and $22.
. . . . Penn Virginia (PVA) March 20, 2015 $8 calls
PVA is breaking to new multi-month highs over $7.50 a share today. While that’s great news, the most exciting development in this company is the fact they cancelled out of an upcoming investor conference.
What’s the big deal about that?
Remember when the company announced they were looking for a buyer a couple weeks ago?
Well, we may hear about a deal soon. When a company backs out of presenting at a conference, it’s a good sign something is about to change drastically within the organization.
Keep a close eye on your $8 calls. If PVA closes over our $8 strike this Friday, any call contracts you have left in your account will be exercised and converted to 100 shares of common stock on Monday.
. . . . Market Vectors Gold Miners (GDX) March 20, 2015 $21 calls
Here’s a trade we established in early January that’s expiring this Friday. As you know, GDX hit our first profit target at $23 in mid-January, giving us a profit of just over 90% on our $21 calls.
Since GDX is currently nowhere near our $21 strike, any calls you have left will expire worthless this weekend.
. . . . Cameco (CCJ) March 20, 2015 $20 calls
This trade from last November simply got off on the wrong foot and never recovered. Conservative investors likely closed this trade when CCJ hit the risk control line at $17.49.
Until next time,
Justin Bennett
***Editor’s Note*** I have a new trade coming out by the end of the week. So keep an eye on your e-mail inbox!
Category: Commodity Trading
