Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

A Good Time To Buy Crude?


Wait on weakness.


It's a good thing next week is only four days (I'll work tomorrow and Monday) because this week felt like an eternity. That's what happens when 400 points is lopped off the Dow in a 48 hour period: Each tick lower felt like water torture, each tick higher felt like a cruel joke. And there is still one day to go.

Yesterday finally saw crude slow and give up ground and also a lot of (formerly) hot niches like solar--like Solarfun (SOLF), Renesola (SOL) and JA Solar (JASO)--and dry bulk shippers--see DryShips (DRYS), Excel Maritime (EXM) and Genco Shipping (GNK)--taking a serious pounding. I've played all of these names this year and last and save for a very old position on DRYS I wasn't holding any of them. That's because the gains I achieved were mind boggling. I love that they came down, albeit it's always a little unnerving to watch any stock give up 10% in a single session, but that is the nature of these beasts. I'm salivating about the prospect of going back to the well on those names; I'm just not sure if I do it ahead of a three day weekend, or if we wait until next Tuesday.

Speaking of wells, crude oil finally took a break but not after reaching more than $135.0 a barrel. I still feel somewhat like I'm in a weird dream or trance when I type out such numbers. Just think: At the start of the year would anyone have imagined that crude would reach $135.0 a barrel?

Is oil the next bubble?
Minyanville's Buzz and Banter -14 day FREE Trial

Yesterday there was a little confetti tossed around because crude reversed early gains and surrendered a couple of bucks. It was the first time it declined in five days.

I think it's a little early to break out the party hats and like those wild solar and dry bulk plays I'd be looking to buy crude oil names on weakness. I'm not worried or fretting about some kind of major pullback, as that's a given and long overdue. I just can't imagine such a correction not being short-lived. My top idea in the space continues to be Transocean (RIG).

Ready To Reload?

Everyone should have a fair amount of cash and be ready to reload. In addition to the aforementioned groups I think agriculture will stage another major rally. It's difficult to suggest that you buy these stocks right at this moment but you don't write them off just as you don't write off the crude oil rally.

I think the volatility could shake out a few investors that jumped in these groups late looking for a non-stop ride. If you want to play the momentum game –it can get rough. However, Potash (POT) has to be at the top of anyone's buy list. Then there are individual names like Google (GOOG), Research in Motion (RIMM) and Apple (AAPL).

< Previous
  • 1
Next >
No positions in stocks mentioned.
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 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos