Exxon, Energy Drop Still Have Long Way to Go-Minyanville

BUSINESS & MARKETS

LIFE & MONEY

VIDEO

COMMUNITY

SUBSCRIPTIONS & PRODUCTS

Exxon, Energy Drop Still Have Long Way to Go

Quint Tatro Sep 10, 2008 10:30 am

Exxon, Energy Drop Still Have Long Way to Go


		There's money to be made on the downside.

Last week I wrote a piece called Cashing In on Energy Drop, which I hope allowed Minyans to mint a little coin while others were scrambling for security.

Now that many of these charts have broken down significantly, I find it worthwhile to update my thesis a bit and look at what we should expect from this point forward.

STOCKS
RELATED ARTICLES
ALSO BY...

First, however, let’s take a look at some before and after for the Select Energy ETF (XLE), Transocean (RIG) and Exxon-Mobil (XOM):

Select Energy ETF, September 3

Chart courtesy of Telechart, www.worden.com

Select Energy ETF, September 10

Chart courtesy of Telechart, www.worden.com

Transocean, September 3

Chart courtesy of Telechart, www.worden.com

Transocean, September 10

Chart courtesy of Telechart, www.worden.com

Exxon, September 3

Chart courtesy of Telechart, www.worden.com

Exxon, September 10

Chart courtesy of Telechart, www.worden.com

Clearly you can see that each of the charts mentioned has already broken. Many will believe the move is over. However, it's always important to remember that trends last much longer than most can imagine. Furthermore, one of the reasons it’s hard to conceptualize how far a short can run is because we’re not trained to view them in this manner.

I always like to tell people who are nervous when shorting to simply turn their monitor upside down: To wit, here's an upside-down Exxon chart.

If this were a long, you would obviously feel comfortable jumping aboard and holding on for the next 20 points. I'm getting rid of the existing short inventory I have, and looking to add much more on the next light volume pullback… er, bounce.

This energy drop has a long way to go, and can make the savvy trader much money on the downside.

GET QUINT'S INSIGHT AND FOLLOW HIS EVERY TRADE WITH A 14 DAY FREE TRIAL TO OUR FLEXFOLIO


Rate this article:			(0 Votes)

more BUSINESS & MARKETS articles »

Daily Article Index �

tags:

CHARTS, SHORTING

Comments (2)

See All Comments »

Adam Barkeloo

View Exchanges


09-10-2008, 10:41 am
Great point(s) Quint. It's worthwhile noting also that short interest pretty much across the board in the energy names is very very light. It seems that everyone bought into the energy theme. The long squeeze continues... Read More

Quint Tatro

View Exchanges


09-11-2008, 8:12 am
I completely agree. I also believe we'll see violent counter trend moves such as we saw yesterday, however I am looking to beef up these positions when these moves take place and ride the dark side train a long way to profitville. Read More


discuss this article and more on the mv exchange

No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options. Click here for a free 14 day trial to OptionSmith by Steve Smith.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2009 Minyanville Media, Inc. All Rights Reserved.