Dug To 30 By Jan 16, 2009?

Discussion in 'Stocks' started by BlueStreek, Dec 31, 2008.

  1. Interesting options play:

    CVX: Earnings Jan 08 th (last qtr Oil average much lower than previous 6 qtrs).

    If CVX misses and guides lower a bunch of others get hit by association: XOM, ConocoPhillips, Schlumberger, Occidental Petroleum Corp, Marathon Oil Corp, etc.

    Nice 5 day runnup in XOM (27% Weighted), CVX (11% Weighted.

    Dug is lower now than when Oil was $148.00 a barrel.

    I wonder how much money comes out of these stocks during portfolio rebalancing in January that was hiding for safe haven til year end.

    I am slightly suspicious of last 5 day runnup in some of these stocks:
    several look just like Marathon`s Chart!
    Top 10 Index Companies1 Weight
    Exxon Mobil Corp. 27.94%
    Chevron Corp. 11.74%
    ConocoPhillips 7.14%
    Schlumberger Ltd. 6.45%
    Occidental Petroleum Corp. 4.01%
    Devon Energy Corp. 2.65%
    Apache Corp. 2.41%
    Transocean Inc. 2.40%
    Halliburton Co. 1.98%
    Marathon Oil Corp. 1.96%

    1 = ProShares may invest in equity securities and/or financial instruments (including derivatives) that in combination, should have similar daily price return characteristics to the fund's benchmark.
    Index Sector Weightings2
    Oil and Gas Producers 75.65%
    Oil Equipment, Services and Distribution 23.90%
    Alternative Energy 0.45%

    2 = Sum of weightings may not equal 100% due to rounding.

    Contrarian arguments welcome:
  2. cszulc


    Time and time again people must be reminded that this is a DAY TRADING INSTRUMENT and day-after-day does not follow the index.

    UltraShort ETFs are 2X the inverse DAILY MOVE of the index.

    Take this as you will.
  3. I understand that it needs Day Trading Interest: but my thesis is that it will be one of the places people go to take advantage of the CVX JAN 8TH CONFERENCE CALL & Earnings release, I bet this thing moves $6 bucks on that day alone, just like when XOM earnings dissappointed a couple quarters ago.

    I think this thing has been pushed down by lack of interest with the holidays, and longs pushing up the DIG-Associated Oil Stocks---Traders piled into DIG--SHORTED DUG LAST 5 DAYS to maximize this move----I think this is a coiled spring waiting to snap back to 30----even on anticipation going into earnings on the 8th by CVX----so I think there are some technical reasons that DUG is this low artificially, and I can think of several scenarious where this thing snaps back over 30 by the 8th of Jan.
  4. Interesting chart of how DUG spiked the last time CVX reported, this could really jump next Thursday, and Dow would be down if CVX AND XOM get hit on same day, what could their earning`s for the last quarter possibly look like except awful!!

  5. the play is to buy some options before jan 08, and watch them explode like 3 months ago, fixed loss, and potentially unbelievable upside on the 8th of jan, look back at oct 9th for comparison sake:)
  6. The Jan 09 26 strike is awfully cheap right here, many ways for this trade to make money:)
  7. nursebee


    You sound like you are selling something.