MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY DECEMBER 15, 1997 (5)
NYMEX CHARTS/QUOTES - OIL & GAS
NYMEX Reference quotewatch.com
Charts: oilworld.com
INDEXES
On Monday, the Toronto 300 Index lost 0.9% or 57.19 to 6584.70.
In comparison, the Oil & Gas Composite Index fell 1.8% or 119.62 to 6465.20. Among the sub-components, the Integrated Oils lost 1.1% or 97.01 to 8781.34. The Oil & Gas Producers took it on the chin, losing 2.0% or 117.96 to 5680.69. Even worse, the Oil & Gas Services fell 2.6% or 78.42 to 2988.71.
I decided to take a glimpse of the oil and gas producers index just to see how much of a beating we have been taking. In the past six weeks (30 trading days) we've had 23 down days and only 7 days when the indexed gained. We began (11/5) with 11 straight days of losses before we had a daily gain. That was for just 1 day and then we went 5 days with losses. We then traded a day with a gain followed with a loss. Following was 5 straight days of gains. During that 5 day span, we gained 287 points. Phew, I thought - maybe this correction is coming to an end. Market then said - you should of known better, for we are now currently in a 6 day losing streak in which we gave back the 287 point gain and then lost an additional equal amount. Not good, really --- not good.
Have we reached the depth of this correction ---- if it is a correction. Perhaps we are in the midst of a bear market. I don't think so. It's to early to determine that. I don't see any strength coming into being for at least another month and then we should see consolidating in share values with a general upward surge in the works around the end of April.
Actually, I have voiced these same thoughts beginning about 3 months ago. The trend has been realized thus far and is playing out the way I suspected. The big-big problem, I didn't forsee the deep correction in the trend. Anyone would of thought I'd begin to sell 3 months ago and accumilate cash/profits for investment in March and April. As it turns out, it was a sound thought. Was anyone paying attention, this investor wasn't.
My current perspective is this. We have weathered most of the storm. If you are a trader, this still isn't the time to be active in the market, unless you are selling. For us longer term investors, I would not hesitate to throw some cash into selective issues comprising of larger companies with sound fundamentals and low cash flow multiples in relation to 1998 numbers. I would reserve cash on hand for timing investment in March and April also. A year down the road, I think we should see major gains on our investing into shares at current or lower prices.
A few days ago, I wrote a review regarding purchase of shares in the larger companies as I just mentioned above. This time I'm taking my advice. Earlier this morning I put out a bulletin announcing partial sale of my favorite holdings, Vermilion Resources and Genesis Exploration. I am retaining shares in these companies amounting to total values which exceed my original investments into each. Profits from the sale are being invested into the larger companies currently in my TOP 20 PORTFOLIO. Thus far, shares of Crestar Energy, Pinnacle Resources, Anderson Exploration, Tarragon Oil & Gas and Poco Petroleums have been obtained. I still have open bids in for shares of Petro-Canada and Talisman Energy. When the market sheds a more favorable light on the oil sector, it's the larger concerns which will lead the way.
One last word regarding Vermilion and Genesis. Shares in these companies are beginning to look real attractive (Both a Strong Buy in the $6.00 neighborhood). I don't want anyone to misinterpet my thoughts on these two companies. These are two very promising junior oils. I sold only to pursue the market strategy I have been discussing over the past few days.
INDEX CHARTS
TSE 300.............. chart.canada-stockwatch.com
O&G Composite. chart.canada-stockwatch.com
Integrated Oil's.... chart.canada-stockwatch.com
O&G Producers.. chart.canada-stockwatch.com
O&G Services..... chart.canada-stockwatch.com
MOST ACTIVE
Because of the length of todays column, I am by-passing the regular listing of the most actives.
You can obtain the information from;
canoe.ca
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