Don't Let Go of Energy, Just Yet

Don’t Let Go of Energy, Just Yet

By TheWild1 at 3 September, 2008, 12:07 am, Categories : Stock Recommendations

For the first half of 2008, most energy stocks were on a tear; however, that has all seemed to have faded over the last couple of months. After all things can only grow so quickly, right?

Many have already dumped their energy holdings, but, for those that haven’t, you just might want to hold on for a little bit longer.

Sure we had Gustav and then soon Hana, Ignacio, abc.. (who remembers the name). The point is winter is just around the corner.

We know it WILL get cold. People will have to put on the heat and whatever else keeps them warm. It WILL get darker sooner, and people will be spending more time inside. The weather will make more people drive, rather than walk, bike, or whatever.

Regardless of the price, hurricanes, or other horrible factors, we can’t avoid mother nature and more energy WILL have to be consumed.

This is why I am not yet giving up on energy. Now I am not going out and buying any stock in the sector. I would still stay with “best of breed” names. Obviously we have to use more energy every winter, so its not like the up-coming season will be any different. In fact, the demand might be a little less than other winters because people trying to conserve, but the demand WILL still be there.

When demand is greater than supply, prices increase. When supply gets low, producers look for alternative sources to help cut costs. It is basically a revolving circle.

Stocks to stay focused on

There are probably many different energy stocks that could be on the rise come winter. The ones I am looking at are Haliburton (HAL) and Chesapeake Energy (CHK). Both these stocks saw great runs for the first half of the year followed by great retreat.

These two stocks shouldn’t be sitting at this level. Once energy becomes the hot topic again this winter, look for both of them to rise. They both have a great business plan and have their hands deep in producing.

We all want to hibernate in the winter and watch some football, at least most of us. Pick up some Hal and/or CHK and come back after the Super Bowl (February) to pick up your profit.

In a market where there are so many uncertainties I will finally be happy to feel the cold air.

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Comments

Alex - My Trader's Journal September 3, 2008

I’m with you. I don’t think energy is done yet. It’ll get oversold and then rally I figure and I’m positioned for that to give me some profit. I’m long CHK and USO (Oil ETF).

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TheWild1 Reply:
September 3rd, 2008 at 9:48 pm

Yeah I am looking USO as well.

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Stock Shotz September 6, 2008

I don’t think the energy bull run is over at all. We interviewed money manager Ryan Krueger and he makes some very compelling arguments as to how this energy bull run still has a long way to go. You can hear the interview at http://www.stockshotz.blogspot.com or http://www.stockshotz.tv

We are located near the Haynesville Shale and I also think Chesapeake is going to be a big winner!

[Reply]

TheWild1 Reply:
September 6th, 2008 at 8:40 pm

Thats pretty cool. I’ll make sure to check that out, and really how much lower can CHK go?

[Reply]