A couple of posts snatched from the SD thread on the March to May O&G rally. The last couple of years I loaded up on calls in the Dec to Feb timeframe, when the oilpatch was pummeled, and made out like a bandido (e.g., in offsetting my SEV losses and then some).
To:Roebear who wrote (88342)
From: Big Dog Sunday, Mar 4, 2001 8:25 PM
View Replies (2) | Respond to of 88352
From Frost:
We have previously discussed historical trading patterns for E&P stocks in the early months of the year. This week's increase in E&P stock prices appears to be the beginning of a rally that has typically begun in early March and lasted through the summer as investors become comfortable with commodity price forecasts coming out of the shoulder months. In the past three years, E&P stocks have increased on average between 7% to 25% from the beginning of March through the end of June. So far this year the E&P stocks as a group have traded mostly flat. The fundamentals for energy stocks continue to be very favorable as commodity prices stabilize in an economically sustainable range that delivers excellent earning potential for the companies. This year the E&P's have the added benefit of potential sector rotation as they continue to report year over year increases in earnings, contrasted with other sectors of the economy that have traded at higher valuations but are now having to reign in expectations for future quarters.
We believe investors buying stocks in the E&P sector in the next few weeks can realize a 10% to 20% increase in value in the next four months if a similar trading pattern holds true this year. We recommend investment in the following STRONG BUY rated stocks with over 50% upside to our target price that have traded flat to down in the first two months of 2001: Chesapeake Energy (NYSE: CHK), Cabot Oil & Gas (NYSE: COG), Forest Oil (NYSE: FST), Newfield Exploration (NYSE: NFX), Prize Energy (AMEX: PRZ) and Pioneer Natural Resources (NYSE: PXD).
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To:John R. Haley who wrote (88346)
From: Tomas Sunday, Mar 4, 2001 11:11 PM
Respond to of 88353
John, Frost is correct, the TSE Oil and Gas Index almost always goes up in March, and stays positive through May.
See:
Oil and Gas Sector Finds its Third Wind
stockhouse.ca |
