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CaptainGrumpy

4,594 Posts.

177

16/12/15

21:46

Post #: 16630532
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Originally posted by Orwell ↑

STO:

Captain, I'm loading up on STO long with a big position. Admittedly this is more the traders instinct in me than the technical analyst. I went in too early 2 weeks ago when the share price looked like breaking back up after that large capital raising. The chart hadn't confirmed at the time and I acknowledged the chance for one more leg down in previous posts but I had wanted to get set once the CR was done and so took confidence from that. Got smashed after that Opec meeting 1.5wks ago. It was a bit undisciplined of me.

Again the weekly chart hasn't yet confirmed an entry so I'm being a bit aggressive again and I've taken an even bigger position this time. My sense is that capitulation has occurred since that Opec meeting. With capital raised between $3.85 and $4.10, that's where the institutions are positioned I consider the big fall last week wasn't funds selling down but margin calls and stops on leveraged positions that got cleaned out. I think it's done now. It was tested by that big Dow fall over the weekend and held, just dipped one cent below the Opec low and recovered, so that gave me a lot of confidence. I've just decided I want to be set in this before the Fed and before any Xmas rally.

Not my normal chart generated entry, so I'm wary of encouraging anyone to follow me.. The target low on the chart was $3.00 where a lot of support is, although might be some stops below that. So if this rally fails it could run further, but there's a lot more upside and tan downside from here. Not following any oil charts so not analysing this too much, just been watching the stock it for a long time and balance of probabilities have tipped me in.

I hated having to buy today after a 6% rise but I don't want to chase it. Bought some yesterday, today and final lot to buy tommorrow. Haven't looked at other oilers as STO it seems the one that's oversold, that's had it's capital raising and is not going to put out a surprise CR when it's SP recovers a bit and it's a large cap stock with good dividend that the fund managers will buy. My position is as much stock specific as sector.

NST

I reviewed my gold stock comments above of Friday 4th December, two weeks ago. Quite happy in hindsight with those comments versus what's played out. The continuing worry is NST though. In spite of two weeks up, it's in a larger frame downtrend. $3.26 in October was classic Wave 5 peak and now falling sharply. Look at the weekly chart and you can see since that peak its had a lower high, then lower low. It will run back up into a Wave B at some point, which could be from here, but more likely off that support at $2.20. That's unclear yet. You're Van Eck trade could still work and just extend this two week counter-trend back up another week or so, but need to be wary of a break-down in the price.

Expand

Great stuff Orwell, thank you!

I'm very much in the camp that oil could fall further, but not much in the short term, and the chances of a significant short squeeze is very high. The charts have been littered with them over the last 12 months and this could be the biggest of all with that big red weekly candle. Smells of short term capitulation to me. I do however doubt the final low is in, so this is purely a swing trade for me.

In terms of finding a bottom I don't think we're too far away. The US shalers economic sweet spot seems to be between $40-60 (post the huge cost rationalisation that has taken place). IE: below $40 many shut up shop, above $60 many more can turn on the taps. As a general rule, if it falls significantly below, I want to be long and significantly over, short.. unless fundamentals change of course.

The 2 key "new" factors that should drive the price in the medium term is 1. Iran - significant increase in global supply due to lifting of restrictions under the nuclear deal. 2. expiration of hedges- Many are expiring at the end of this year so there will be a lot of supply that is no longer economic. Which factor will have the bigger impact on the supply side is impossible to forecast, but I favour Iran, hence the swing trade mentality.

I took a moderate position in DLS yesterday after it pulled back. As well as a smaller position in STO and a few sheckles in SEA. DLS has been my favoured oiler for some time. STO you made a compelling case earlier, and SEA as I think they could multi bag from here without too much trouble.

As we've discussed before I also want exposure prior to the FOMC, but I'm far from all in. There will certainly be time to jump on, but of course the steep gains will be made by those prepared to roll the dice. Similar scenario for the golds, but I think there is more risk to the downside, so took some off the table today. That said I don't think we can judge those trades or charts until after Friday close at the earliest (post rebalance). If POG does not tank tonight I'll be back in heavily into Friday.... Primarily RRL

Thanks again
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