Tuesday, December 22, 2015

Window Dressing or Not; Oil Stocks Up Today

The end of the year is often referred to as "Window Dressing" time among traders. Portfolio managers add beaten-down equities of quality companies to their portfolios. The thinking is that they can say that these companies are in their portfolios when it's time to create a prospectus or talk about quarterly results. If in January they feel the stocks are going nowhere the portfolio managers can always dump them, but if they're recovering then it's time to let them ride to higher prices!

Solar City (SCTY) rocketed 34% to nearly $60 a share Wednesday when Elon Musk, he of Tesla fame, announced he was buying a majority of the solar panel maker. As mentioned previously by this blog, Solar City is owned and founded by two of Musk's cousins. Our target remains $90. It may be ambitious to think we'll see that in 2016, but for now we'll stand by that number. SCTY is trading around $52.50 today, down 6.4% for the day but up from the hellish depths it reached at $24 around Halloween.

Oil giants Schlumberger (SLB) and Chevron (CVX) are no doubt getting a boost in part from this window dressing phenomenon. The Baker Hughes American and Canadian drilling rig count actually went up by 17 rigs on Friday, the first rise in months. Some investors may feel this is the uptick from the bottom as oil companies have cut as far as they want to (or can) cut. In any event, oil is up slightly about 1% today and SLB is up 2.25% at $69.50 and CVX is 1.27% higher at $90.36 at 10 am.

Btw, U.S. regulators are seeking more concessions in the proposed merger between Baker Hughes and Halliburton.

Happy Holidays, Merry Christmas! Let's all be thankful for this 6-year bull market that has the Dow over 17,000. May the New Year 2016 bring more of the same for the Bulls, or as I like to call us, the good boys and girls! As for you naughty Bears, be patient. History tells us inevitably your time will come.

Tuesday, December 8, 2015

Big Snap Back In Oil After Cratering

Oil markets continue their volatility, as the price of oil tested lows of $36.64 for a barrel of West Texas Intermediate (WTI) as it was down $1 this morning. The price has snapped back, however, and has even traded in positive territory for about an hour.

The oil majors are up off their lows, but are still being crushed for a second day. Chevron is down 88 cents and Exxon Mobil is down $1.65 in the midday trading.

Oil services manufacturer Schlumberger is down about a dollar on the day.

We're looking for oil to continue cratering, expecting it to test $30 a barrel for WTI in the coming weeks. What all this means is, it's time to hop in the car and visit grandma, Aunt Edna or whoever! Enjoy the ride, the gas is cheap!

Disney (DIS) is up $10 since our post in September, now trading around $113.  We're looking for it to hit $125 by the spring.