Friday, September 08, 2006
Quick Alert: Oil is Cheap, but Breaking Down
The oil stocks are now ridiculously undervalued, based upon traditional PEG ratio valuations.
However, the charts are screaming "sell now, else the margin clerk is gonna clean your clock." Those without margin accounts, please disregard the previous sentence.
I must say, buying the oil stocks on dips like this has worked consistantly for 2 years. So, what's different now?
Well, if the U.S. heads into recession, oil will likely trade down to $40 or lower. Maybe that's why oil is getting its ass kicked, on a daily basis. Recession fears.
However, if you are a believer in the oil story, now may be an opportunistic time to buy cheap stock. With my money, I'll probably wait to see prices stabilize, before getting my feet wet with "black gold."
My watch list includes:
VLO, TSO, HOC, CEO, UPL and DK.
However, the charts are screaming "sell now, else the margin clerk is gonna clean your clock." Those without margin accounts, please disregard the previous sentence.
I must say, buying the oil stocks on dips like this has worked consistantly for 2 years. So, what's different now?
Well, if the U.S. heads into recession, oil will likely trade down to $40 or lower. Maybe that's why oil is getting its ass kicked, on a daily basis. Recession fears.
However, if you are a believer in the oil story, now may be an opportunistic time to buy cheap stock. With my money, I'll probably wait to see prices stabilize, before getting my feet wet with "black gold."
My watch list includes:
VLO, TSO, HOC, CEO, UPL and DK.
Comments:
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When is buying stocks NOT a gamble? The pertinent question is always, what is your time frame?
About that recession...when will we know we're having one? Only in hindsight. How long will it last? Probably not long, since the underlying dynamics of global economic growth are unchanged.
Therefore, I am a believer in the oil story--long term.
You fearless testosterone-fueled traders, OTOH, have a different set of variables to deal with.
Best of luck to all.
About that recession...when will we know we're having one? Only in hindsight. How long will it last? Probably not long, since the underlying dynamics of global economic growth are unchanged.
Therefore, I am a believer in the oil story--long term.
You fearless testosterone-fueled traders, OTOH, have a different set of variables to deal with.
Best of luck to all.
# posted by 
: 5:18 PM
: 5:18 PM
Cathie--
You mustn't dismiss the possibilty of a mind boggling drop in crude. It has happened many times.
I agree when you say: "When is buying stocks NOT a gamble?"
However, there are high probabilty gambles and crazy bet the house on black gambles, such as oil now.
Hey, I might just bet the house next week. We shall see.
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You mustn't dismiss the possibilty of a mind boggling drop in crude. It has happened many times.
I agree when you say: "When is buying stocks NOT a gamble?"
However, there are high probabilty gambles and crazy bet the house on black gambles, such as oil now.
Hey, I might just bet the house next week. We shall see.
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