Weekly Update: October 7, 2015
Weekly Update: October 7, 2015
Big Picture Outlook:
The past few days have brought some very important developments to the energy markets…
First of all, WTI crude is breaking sharply higher from the month long trading range at $45 a barrel. The commodity ran as high as $49.50 in this morning’s session as investors factored in new Syrian war developments as well as slowly declining US oil production.
But that’s not all…
The Energy Select Sector SPDR $XLE, which is an important bellwether of overall oil industry performance, broke above an important trend line.
Take a look…
As you can see, $XLE rallied above (green circle) the downtrend (red line) from the May 2015 highs. With this important technical hurdle out of the way, the door is open for further bullish action in oil producers in coming months.
Let’s get to this week position updates…
Portfolio Highlights:
Editor’s Note: I won’t update every open position in every update. I focus on the positions with significant news or price movement.
. . . . US Oil Fund $USO November 20, 2015 $14.50 calls
As you know, in yesterday’s trade alert I recommended closing this trade at breakeven in order to pick up the US Oil Fund $USO December 18, 2015 $15.50 calls. Rolling out to December expiration will give us more time to capitalize on a WTI upturn.
Keep in mind, conservative investors collected 50% gains in these November calls when $USO hit our first profit target at $16.00 on August 31st.
Keep holding your $USO $15.50 calls for further upside!
. . . . Dominion Resources $D November 20, 2015 $72.50 calls
$D just barely tagged our risk control line at $68.50 on October 2nd. As a result, conservative investors may have closed this trade to control downside risk.
If you’re more aggressive, you can keep holding these calls for a potential breakout in $D.
. . . . Southern Company $SO November 20, 2015 $45 calls
$SO is still working on that breakout above $44…
Shares of the utility company rose slightly above $45 in Monday’s trading session before pulling back to $44.68 this morning.
Monday’s upturn sent our $SO November $45 calls up to a $1.05 bid, which is a 40% gain from our entry at $0.75.
Keep holding these $SO calls for the distinct potential of a continued run to higher prices. Remember, our first target is at $46 while our second target is at $48.
Move the risk control line in $SO higher to $43.90.
. . . . Newmont Mining $NEM November 20, 2015 $18 calls
Last Friday’s trade in $NEM is getting off to a great start…
In fact, $NEM is tagging our first profit target at $19 in today’s session. The rally in $NEM has our $18 calls trading at $1.78 this afternoon, which is a 131% gain from our entry just a few days ago!
Since we’ve achieved at least a 100% gain and also hit our first profit target, everyone should be taking at least partial profits in this trade.
If you’re aggressive, keep holding a portion of this call position for further upside in $NEM.
Until next time,
Justin Bennett
***Editor’s Note*** I have recently joined the Twitter revolution! In case you’re unaware, Twitter is a remarkable tool for distributing timely market information. Throughout each trading day you’ll find me posting commodity related articles and information that will help you get a better handle on the markets.
You can follow me by searching for my twitter handle: @CommodityRes
See you in the Twittersphere!
Category: Commodity Trading
