My Focus: Energy

For the next week, my focus will be on energy and energy only. I have no desire to trade anything else as I feel we have a golden opportunity in front of us. Let me explain…

Given the fact that we have a major hurricane headed into the Gulf coupled with everything going on with Russia and Georgia, oil was barely up today. To me that signals the commodity wants to trade lower, (but at the same time has taken such a beating that it could bounce significantly).

This is a perfect scenario. Let’s say the cane misses the Gulf– everyone will be rushing for the exit sending oil prices below $100. Let’s say the worst case happens, and the cane heads straight for the rigs– we could easily catapult higher.

My focus will be to watch the weather more than the ticker. As of right now I am heavy in oil. Should the “deacon of death” move course, I will move course and switch all my efforts to shorting these same names. Should the cane miss, I believe there will be a better trade in shorting the group, they will DIVE!

I was speaking to Gio earlier today about this same scenario. He likes this trade, long Oil/Short Coal. This just makes sense, but I will have him explain further. Look for a post later tonight.

Note: I hear many say it’s wrong to profit from disaster, I call it a hedge on my life.

Need another Hurricane play? Try T-3 Energy Services, Inc. [[TTES]] , the company designs, manufactures, repairs and services products used in the drilling and completion of new oil and gas wells, the workover of existing wells, and the production and transportation of oil and gas.

The trade: The stock is sitting on the 200 MA, buy here with a stop below the 200.

Update on storm here.

I look at hurricane plays as a hedge against my own livelihood. If you’re wondering why I’m so heavy in energy at the moment, take a look at the picture below.

The way I look at it is if I get hit by a major storm I will benefit from a ragin’ account filled with call options. However, if it misses me I will take a few losses– but, spared from the deacon of death.

It’s a win-win in my book.

Right now National-Oilwell Varco, Inc. [[NOV]] is trading below $75.

***Updated Projected Path***

Gustav has brought a buying frenzy to energy related names. Let’s take a look at high volume movers:

Oil & Gas Equipment and Services

1. Halliburton Company [[HAL]]
2. Schlumberger Limited [[SLB]]
3. Baker Hughes Incorporated [[BHI]]
4. Weatherford International Ltd. [[WFT]]
5. National-Oilwell Varco, Inc. [[NOV]]

Oil & Gas Drilling and Exploration

1. Petroleo Brasileiro SA (ADR) [[PBR]]
2. Patterson-UTI Energy, Inc. [[PTEN]]
3. Nabors Industries Ltd. [[NBR]]
4. Transocean Inc. [[RIG]]
5. SandRidge Energy Inc. [[SD]]

Independent Oil & Gas

1. Chesapeake Energy Corporation [[CHK]]
2. XTO Energy Inc. [[XTO]]
3. Anadarko Petroleum Corporation [[APC]]
4. Petrohawk Energy Corporation [[HK]]
5. EOG Resources, Inc. [[EOG]]

Cowen is out positive on Energy Conversion Devices, Inc. [[ENER]] saying they expect Q4 EPS to meet or beat our 20c ENER estimate (vs. St. 16c), based on revenue and margin upside, with operating expenses (ex. restructuring) below consensus. Continue reading…

I bought National-Oilwell Varco, Inc. [[NOV]] & Petrohawk Energy Corporation [[HK]] at the open.