An update on the TSO position. I am closing my position on TSO long. My fundamental views remain the same and I do believe this stock will rise over the course of one year. However, the recent speculation of impact of the higher refining capacity that I dissed in my last post has gained more credibility with the recent crack spread values. The oil futures have decreased. This has a direct impact on crack spreads and the biggest losers are the refiners. To add to this, Eric Bolling from CNBC's Fast Money, a long time bull on refiners, is pulling out. While I may not necessarily agree with all the views of Fast Money traders, I consider Eric an authority on energy trading. He is out there in the pits and he has a ground floor view of this whole thing. When Eric Bolling says sell, you don't ignore.
Given all the above developments, it doesn't make sense that I remain in TSO for the time being especially since I entered an options trade. As of this writing, I am closing my trade. The update portfolio list with overall gain/loss is listed below.
I would like to reiterate I continue to hold my long term view on TSO and other refiners. We will certainly look into reentering this trade in near future.
Market Commentary - Dow 14000
I am maintaining a neutral to bearish view on Markets especially starting the week of 7/23 based on some of the conditions and uncertainties I covered in my last post. That said, the market will most likely remain bullish this week and we should touch 14000 based on two factors (a) how the charts turned out at the end of Friday on major indices, (b) Options expiration. Unless the triple whammy of earnings/Ben's testimony/lack of institutional buying power overwhelm the market in a negative manner or in a sell-the-news mode sooner than expected, the above two factors may end up working in the favor of an upside for next week. And here is why - The charts display an upside week based on weekly candlesticks, slow stochastic and MACD signals. On the other hand, many traders would most likely try to cover their protective or speculative puts giving another reason for market to buoy up.
I will be closely watching my long stocks next week. It may be a good time to take further profits off the table. If things remain in the same shape as I have been speculating, it is quite likely I may plan to wait out the rest of the July after the next week. We will make a determination next week.
New Picks
PLUG - This is a play on rising energy costs and recent environmental awareness amongst the global masses. The Company is focused on proton exchange membrane (PEM), fuel cell and fuel processing technologies, from which multiple products are being offered or are under development. PLUG has some ways to go before it can come up with more commonly used commercial products at mass level. That said, it is taking the right steps to get out of its research-outfit mold and target for profitability. Through its acquisition of Cellex and General Hydrogen Corporation in April and May of this year, Plug Power is trying to engage both telecommunications and material handling as near-term markets and contributors to its revenue growth strategy. This looks clever. One interesting thing about this stock pick is this is not meant to be a short term trade. I believe this should be in every one's long term portfolio, 401K plans and similar baskets, and not just a short term trade. It seems the world is about to step its foot into an era of hydrogen and solar economy. Things may start firming up around the drivers of this new economy in the next one to two years and with oil potentially touching 100, it is quite likely that by 2009 companies like PLUG could become bell-weathers of hydrogen economy's domination on this planet. It is too early to tell anything firm but to me, the story has a good ring to it.
On Monday Morning, I placed an order for 3.25. This will potentially remain in our portfolio for a pretty long time. So there are no specific guidelines in terms of picking a good time for placing the trade. You can look into buying this stock any time over the course of next one to two months unless of course price doesn't shoot up too much due to some buy out rumor.
The Rathi Portfolio Holdings Open List
Open List
- GLD - (Equity trade) buy long (Opened at 65.61 on 7/10/07
- PLUG - (Equity trade) buy long (Opened at 3.25 on 7/16/07)
- TSO - (Option trade) buy Jan 2008 Calls $50 strike (Bought at 14.40 on 7/10/07)
- BZH - (Equity trade) sell short (Opened at $41.54 on 2/14/07)
- ISRG - (Option trade) buy Jan 2008 Calls $130 strike (Bought at 9.60 on 3/8/07)
- CRDN - closed at 79.37 - 40.63% Gain
- TSO Jan 2008 50 Calls - closed at 12.7 - 11% Loss
Overall Gain/Loss - 30 % Gain
No comments:
Post a Comment