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Two Ways To Play: As Weather Cools, XTO and Chesapeake Heat Up


Strengthen your portfolio in good times and bad.


Nat Gas Bottom?

Bloomberg reports the worst may be over for U.S. natural gas companies. Investors, who purchased a net $114 million of XTO Energy (XTO) and Chesapeake Energy (CHK) last week, may see the stock prices rise by about 20% between now and the end of the year as colder weather arrives and cheap valuations make these companies look attractive.

XTO's 31% drop in July was the main reason Ospraie Management was forced to shut down its largest hedge fund, and to date, nat. gas futures have fallen about 44% since June 30. But futures now show prices may increase 16% to $8.63 per mln BTU by February. See Professor Quint Tatro's Natural Gas Plays You've Never Heard Of.

From the Bull Pen: Bulls are eyeing a play in Clean Energy Fuels Corp. (CLNE) should the stock clear $20 resistance. If and when.

From the Bear Cave: Bears can attempt the downside in the natural gas ETF (UNG) when the stock approaches the $40 level. Buy stops can be set above that mark.

China: Red Bean in Green Sea

As the rest of the world rallies on the Fannie Mae (FNM) and Freddie Mac (FRE) news, of notable concern is the lack of participation of Chinese stocks. According to Bloomberg, property values helped contribute to the negative sentiment. Shanghai's new home prices fell 24% in July from the previous month, the most since July 2005. Further, the volume of new home sales plunged almost 70% in both July and August from a year earlier.

The CSI 300 Index, which tracks both the Shanghai and Shenzhen, lost 2.5% last night leading all major indexes as the world's worst performer this year. It is headed for the lowest close since January of 2007.

From the Bull Pen: For those looking for Chinese exposure, Yingli Green Energy (YGE) has been positively mentioned. Bulls can attempt the upside as the stock approaches $14 with sell stops below.

From the Bear Cave: Bears can press downside in China Mobile (CHL). Buy stops can be set above $55 (resistance on the 60 minute chart).

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng +4.32%, Nikkei +3.38%, Sensex +3.18%, Taiwan +5.57% and Shanghai -2.68%.

Glancing towards Europe, we see the CAC +4.70%, DAX +3.39%, FTSE +3.81%

As of 8:40 AM EST, S&P futures are up 40 points to 1280, and Nasdaq futures are higher 40 points to 1809.

A Look At Commodities

Commodities are higher. Crude oil is higher 1.54 to 107.79. Gold is up 14.20 to 813.00.
Silver is up +0.135 to 12.380, and Copper is up +3.85 to 316.20.

The dollar index is higher +0.316 to 79.248.

On the Radar


3:00 Consumer Credit: $8.6 bln cons.

Click here for the full trading radar.

Happy Monday! Good luck!

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No positions in stocks mentioned.

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