Wednesday, March 19, 2008

Bookkeeping: Second Natural Gas Play - EOG Resources (EOG)

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I am adding a 2nd name to my mini natural gas basket, which I started Monday with Cabot Oil & Gas (COG)... today I am beginning a small stake in my #1 target EOG Resources (EOG), which has some very impressive new expansion opportunities recently announced. [Feb 29: Natural Gas Focused Exploration & Development Companies Continue to Shine] Much like the fertilizer stocks which have been impervious to meaningful slowdown it has finally taken some hit... down to its 20 day moving average of $115. I am starting small since I think more downside to go, and am targetting $106-$108 (which is just above the 50 day moving average). There is a
"gap" in the chart around $108 which almost surely will get filled.

It appears the commodity trade is being abandoned by hot money so I'll be waiting at lower prices to scoop these guys up when/if they get to my targets. In the meantime we'll take the body blows as positions dominating the fund falter (temporarily). But we're only in day 2 of what could be a longer pullback in these hot money groups, so I'm not jumping in too aggressively yet.

I started a small stake of 0.5% of fund at $115. Looking to add significantly at lower prices.

Long both names mentioned in fund; no personal position

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