Things are going so well, that Goodrich actually placed a 3M share offering at $64 today and the stock is trading above it. That's a sign of serious strength - this is about a 10% dilution.- Goodrich Petroleum Corp. late Tuesday priced its public offering of three million shares at $64 each, a slight discount to the stock's last closing price of $64.96.
- Net proceeds, estimated at $183.9 million, will be used to pay off Goodrich's outstanding balance on its senior revolving credit facility. The funds also will be used for general corporate purposes, including capital expenditures and expansion of its activities in the Haynesville Shale.
- Goodrich currently has about 33.4 million shares outstanding.
- Natural gas company Chesapeake Energy Corp (CHK) said on Tuesday it plans to sell 25 million shares of its common stock in a public offering, with proceeds going to temporarily pay down debt.
- Chesapeake also said it also expects to tap the revolving bank credit facility again to fund its plans to expand drilling and leasehold acquisition in areas including the Haynesville Shale in northern Louisiana.
- In March, Chesapeake said Haynesville might hold as much as 20 trillion cubic feet equivalent of potential natural gas reserves.
I am now sitting here wondering do I bite the bullet and jump in one of these 4 holding their 20 day moving average at these prices (i.e. they won't go lower?) Or could take the easy way out and buy the giant, CHK. Still thinking this 
one through, but prefer one of the 4 smaller "pure plays" in this group - the smaller the better for buyout potential. With the market still looking mighty pathetic perhaps we get another chance at lower prices. HK @ $35, GDP @ $55, CRK @ $65 or GMXR below $60 would be a nice addition to our natural gas basket. Might be asking too much, right Gordon G?No positions, but stalking eagerly
9 comments:
Around noon today I bought some UNG because I couldn't figure out what to do. Is this a bad play on that area?
UNG is just the commodity itself, so its not really any 1 area - it's all areas. As long as Iran wants to fight Israel you should be good ;) Or hurricane season.
Thats my one reason I think nat gas exposure needs to be increased - we are unfortunately overdue after 2 years of nothing major.
But nat gas still trades at a historically low ratio to crude - so either nat gas is undervalued or crude over. Probably some of both.
thought about adding an order of CHK here as well but its closing near the lows of the day so that's not encouraging. going to give it a few more days to see how it trades.
waiting on UNG as well. probably won't enter this one til later down the road.
like your take on the smaller guys. originally wanted to add SD to my basket of natgas but it looks like that thing printed a double top, so i'll have to give it more time to play out like ung. in the mean time these smaller guys might be the play. time for more research as always.
CHK is the 800 lb. gorilla. If you want a trade than buy one of the 4 others. CHK is definitely a L/T purchase. This price decline for CHK is a buying opportunity.
Since the VIX has not spiked yet, I am long puts on CRK... it must pull down to its 50EMA and that will mark the bottom of this downtrend in overall market...
If I loose in this trade, I did mention it here! ;)...
Cheers..
Ok sounds like a deal. Then we can call it the Pankaj bottom.
I just want this to be someone's bottom, soon.
I am just going to buy whichever one falls first. Shoot me a message when it happens since there is so much to keep track of.
p.s. how far out of duration do you buy and do you use in the money or out? Man, it seems hard with the spreads to make money on anything near term unless the move is relatively sharp, either way. But I guess we've had a lot of sharp moves.
Going back to technicals
I read how you were eaten up by MOS because of the 50EMA garbage.
Do you ever use other EMA's. I mean I think 50EMA is so arbitrary...I have 20, 50, 100,150,200 on my charts at all times, because some stocks like to tag different Moving averages. Like the coal stocks tagged the 8EMA on their monstrous run in May,JUNE and thats how I knew to exit ANR around 100, when it broke down below 8 EMA
But anyway, I think MOS likes to break down closer to the 100EMA. I put all on the screen to see what moving averages are hit during regular selloff, more severe sell offs, and waterfall panic dumpage.
Also, generally, the 20EMA is for stronger uptrends....so MOS would be a good sell if it breaks below the 20EMA, and a buy at the 50EMA area, because you'd sell it when it breaks its firm uptrend (20EMA) and buy back when it moves toward the 50EMA (because the 50EMA is more for intermediate trend and if a stock breaks the 50EMA it is usually bearish for a couple months, but we know MOS is dirt cheap and bullish so we don't care.
The other thing is that if you sell at the 50EMA and buy back in lower, therefore around the 200EMA it is dangerous because stocks that break down below the 200EMA are Bearish, longer term, and if MOS gets even close to doing that it'd mean something Severe is wrong and it may be a long term bearish play (like if ethanol was eliminated)
I mean that I wouldn't plan on buying MOS too close to the 200EMA because it probably won't get there and also if it keeps tagging it, that is not good, it shouldn't have to do that, it shouldn't break down that far.
Sorry if I see annoying, but I was thinking about this chartology problem all day. Because I made the same mistake in ANR, I was prepared to buy incrementally all the way down to upper 50s...but I realized that if it actually went to upper 50s that would be BEARISH, because it would mean breaking all moving averages. So it is a counterintuitive move.
I wasn't sure if you have realmoney because you list it as your favorites, but Dan FITZ on the site, does a great job on realmoney, with FITZ BITZ and 3 stocks i saw on tV. He helped me learn technicals and you should look at his stuff (the 3 stocks i saw on tV videos are free on thestreet.com)
Thanks for being completely honest about your buys/sells/ thoughts and mistakes. Humility makes everyone in every profession 100% better.
Ok, Pankaj bottom is coming in the near future! ;)
I usually buy just out of the money options but there is not a fixed rule and each equity has it own character... e.g., when equities like CME, GOOG, BIDU, MA and POT move, they move big...Usually for such big movers, I buy way out of money once the trend is spotted... For slow movers, i buy just out of the money.. and for really slow movers, in the money and a longer term contract is the better option so that time decay is no issue...
Just my style and prefernces and everyone has their own.. :)..
Cheers..
Bill,
I'm a fundamentalist first and foremost and probably 90% of people in the market are a better technician than I. I believe my strength is finding stories early - sectors, trends, and stocks. As long as I do that consistently I will do well.
I believe TA loses its ability very quickly in markets that are panicked. TA in a trending upward, sideways, or mild downward works pretty well. The idea is TA should tell you something about *the stock*. The action in stocks right now are hostage to *the market*. Hence the TA is hostage to *the market*, hence I find it a lot less useful now. If hedge funds are dumping winners overboard simply to raise funds to meet redemptions does that imply a damn thing about the stock? No.
As for movements around moving averages I sometimes buy and sell around those key averages all the time. Yes a stock falling to 200 day could break through which is why many times you'll see me buy, as it bounces and then quickly sell if it breaks through. You never know if it will bounce there or break through. But if it bounces and you are not in, you usually miss a big move.
I don't mind answering your questions but this is not a tutorial site. I try to be very open with my thoughts and strategies, and people can criticize and pick and choose whatever they want to hear. I am learning every day and in 30 years I will be learning something new.
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