Here are a few quick updates for trading during this earnings season:
Commodities - Trade these names quickly and look to sell the rips and buy the dips (thanks Fast Money for this phrase).
I am looking for oversold conditions and carefully buying these names. For instance, I have had a limit order out to buy the COAL ETF (NYSE: KOL) @ 42.90 in the event it reached to these fundamental levels which I considered cheap. I am not a technical chartist but I have found that these levels seemed reasonable, offered support and not to mention would require almost a 15% decline from recent levels. Well to say the least I hit my limit and will the recent pull back this morning I unloaded KOL for around a 2-3% gain.
Clayton Williams (CWEI) - Going back to the theme identified above, I am going into earning season and if I see a fundamental shift in the business model of one of the stocks we own its time to unload. I am sad to say that I have finally sold CWEI after its most recent earnings after holding on for over 2 years. From the depths of 30-40$ a share we watched this ride to over 100% gain. The earnings report available to everyone this morning before the actual call told the story. They had losses on derivatives, and some of the wells are costing more that what they had hoped...throw into the mix that the commodity sector is taking it on the chin...its time to sell this gem of a stock.
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