Purely on technical reasons
- Adding to EOG Resources (EOG) which has now fallen from $134 to $106 in under 2 weeks, now sits at its 200 day moving average. Taking it up from 0.9% stake to 1.7%.
- Encore Acquisition (EAC) is showing some nice relative strength and refusing to sell off below the 50 day moving average of just over $64. Doesn't mean it won't, if the sector continues to break down - but so far it has not. So adding some here in the $65s and pushing it up from a 1.3% stake to 1.7%. As always, buying a stock like this near a moving average involves risk - the stock could break down further and the 200 day moving average for EAC is way down at $46. So no guarantees this level holds. EOG Resources is a great example of what happens once a key moving average breaks.
XTO Energy (XTO) has broken its 200 day moving average ($58) which bodes poorly, and Cabot Oil & Gas (COG) is in no man's lands, broken it's 50 day moving average ($62) but not close to the 200 day ($49). If it falls to the 200 day I'll add there, currently at $55. It is quite interesting to see the discrepancy in these charts versus the so called "Haynesville focused" natural gas stocks which won't even break down below their 20 day moving averages.
Unfortunately we must continue to liquidate some short exposure to do these buys, but now that bargains (or are they?) are being created in areas we've taken profits in at higher prices, it's time to begin layering in (or is it?) ;) Remember, Encore Acquisition has a potential kicker [Jun 18: Will Encore Acquisition be Bought Out?]
Have I mentioned this is not a buy and hold market? Even the best merchandise gets smashed every few months. (or sooner)
Long all names mentioned in fund; no personal positions
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