Crude Oil

[calven]

$WTIC - Oil - Light Crude Continuous Contract (futures)

Two channels - an upper and lower. Currently testing the 200 day ma.

First support 55
Then 50....

Between these two levels is a great place to start buying oil companies for the long term holder...IMO

All this talk about 40$ oil is ridiculous....time will tell


The bottom chart could be the Phantom support line.... coincidentally it calls between 50-55 support levels.





-Cal  

[calven]

Think about oil forecasts in the simplest sense possible. Here are the overriding factors....

*remember I am thinking about the LONG term

FACT 1: we have a gradually increasing demand and limited supply (meaning oil prices have to rise -all things held equal)

FACT 2: Eventually oil will run out and oil companies will go out of business. (unless they adapt into alternative energy companies)

FACT 3:  We don't actually know when oil will run out or when oil supplies will dwindle. War is a great time for it though... look at our war in IRAQ - oil rocketed... (buy oil companies during war times)

FACT 4:  Oil crunches are likely to happen during seasonal changes or period of economic expansion (china)

FACT 5: When oil starts running low oil companies will have hoards of cash to spend somehow. They either liquidate or buy alternative energy companies.

[dhiraj19]

Good post Calven... Any comments on Natural Gas? 
- Dhiraj

[calven]

In general I would say energy as a whole is bottoming...

Natural Gas
http://stockcharts.com/h-sc/ui?symbol=$NATGAS&period=DAILY&years=2&months=10&days=0&id=p46352739846

Unleaded Gas

http://stockcharts.com/h-sc/ui?symbol=$GASO&period=DAILY&years=2&months=10&days=0&id=p95735986176


It's probably a good time to load up on energy again...at least get your feet wet

cal 

[rurouni]

Hi Calven,

Good post Calven.  If this stock hits the support line, is that a good time to buy?

[calven]

Well its actually a commodity. The chart I have show is basically the price of oil... 

You would want to buy "oil stocks" to play the oil bottom....

Basically Im saying old oil names are going to come back to life with winter within the next 4-6 weeks... maybe sooner

cal

[calven]

As I said a week ago , oil is bottoming. Crude oil now back above 60$ a barrel...

Market also showing weakness. Coincidence?

cal   

[LuckyFish]

Hi Calvern,
I agree with you.  There is a very good chart at this link.  The writer also thinks that oil has bottomed.  Sorry, I can't figure out how to post the chart here.
http://321energy.com/editorials/hoye/hoye120705.html

I bought a few options back at the end of Nov in $XNG and $OSX.  First time I ever did that, and never realised that it was so volatile, but doing okay on them so far.  I've been hearing that the options on OIH (an EFT) are more liquid.  Do you trade any options on $XNG, $OSX or OIH, or how do you trade them?
Thanks,
Brigitte

[calven]

LuckyFish,

I like that chart you provided. Very nice! I think oil has bottomed for the short term at least. With oil bottoming and energy in general bottoming I think the COMPX and other major markets wills show some uncharacteristic weakness heading into the holiday season.

We will truly see how high gas prices affect consumers this holiday season. Time will tell, but I think spending this holiday season might slow a little...

Sorry, I don't trade options at this time although I do know a little about them.

I think $WTIC (Crude Oil) started bottoming last week. If you read up a few posts I posted charts showing my reasoning. Call options on Oil and energy in genera look good to me!

Good luck and Happy Trading,
Call

[calven]

As I told you 2 weeks ago. Crude is bottoming.


Now here is the chart...

[calven]

Like I said...Oil bottoming..should test new highs.

[rcr]

Yep, i've just been watching bloomberg and some analysts are confident we'll see 75-80/bl.

[calven]

I have been telling everyone that oil prices are here to stay...

Everyone forgot about oil when it retraced back to the mid 50's... meanwhile I  quietly sold tech and bought back oil - needless to say its back near 70!   

Oh and Cramer is a joke. He said oil was "Done for the next 6 months!" about 2-3 months ago on mad money, then I watch the show and he "magically" switched sentiment and acted like he never told millions of people this...... what a clown.

Anyone else notice this?

[Miguel007]

February crude closed at $68.35 a barrel on its final trading day, It gained $1.52, or 2.3%, for the session, and closed out the week up 6.9%. March crude rose $1.29, or 1.9% to end at $68.48 Friday. February natural gas rose 37.5 cents, or 4.2%, to close at $9.28 per million British thermal units for the session. The contract closed up 5.6% for the week.
According to chart above we can see that we are now near of 70$ level and I think that level are now inevitable. As a reminder, the NYMEX front contract tested a record high of $70.85 in late Aug 2005. 

[calven]

Nice symmetrical triangle pattern forming - could be a continuation eventually later in 06