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Strategies & Market Trends : Strictly: Drilling II
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To: mishedlo who wrote (5877)12/28/2001 7:24:13 PM
From: isopatch  Read Replies (2) of 36161
 
Hi M. Large & small specs are usually wrong vs commercials.

Expecially true in a very weather sensitive commodity like NG during a major shift in temperature conditions as we've seen in just he past week. On top of that we just got an OPEC agreement today. Even if that breaks down in a month or two? Right now it's a plus. And crude COTs are even more bullishly skewed than NG.

If this hard freeze continues for another week or two, specs will be forced into major short covering which will drive up NG prices. Savvy players know this and I expect they'll buy into the market in the 1st 1/2 of next month to try and run of the shorts buy stops. IMHO, could be some real fireworks on the upside, as soon as next week, unless another spate of mild temperatures show up on the 10 day forecast maps by later part of next week.

If that weren't enough, Monday is the final day for individual tax selling to establish losses in this sector which has been badly battered all year. Selling is already oveer in issues showing a lot of strength during the past week or more. Other stocks probably still have some selling to go Monday before they start running to the upside.

Right now running the largest sector weighting in the patch since Summer 2000. In other words...huge.

Long EPEX, CRK, PQUE & CRZO in sm NG exploration and development companies. DVN in lg cap NG E&Ps. In drilling, DO. In oil and NG equipment & services: HOFF, NSS & MWP. Sm cap APL in NG pipeline/gatherers. And in the tankers: VLCCF and NAT.

Will probably trade in and out of some of those names as the trend develops and further spotlights the strongest performers.

Isopatch
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