Monday, August 17, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

Hewlett-Packard is reporting earnings this week. It’s back to school time of the month which could increase current computer and other related sales. Inflation is still flat. I would suggest it could stay that way with the economic slowdown in certain parts of the world still slow, although the Asia region still has brisk growth, especially in China. The mortgage mess is not over yet as senior citizens are having some trouble with their reverse mortgages. El-Erian of Pimco is saying the market is overly optimistic right now. I agree with him, and the market could go still higher from here very possibly. Although some strategists are calling for an abrupt big fall soon, again possibly. Traders are talking about where to take profits. Seems to me they are looking for the exits right now before if and when a very possible selloff stampede hits.

My Stock Pick This Week

I’m selling short a big energy company this week. The fundamentals don’t look so great moving forward right now, but I never really cared about the past fundamental reports so much anyhow. I’m more interested in the fundamentals going forward, and I don’t have the resources and information to make that forecast, and especially in an economic world like this right now. This energy company stock price chart has a low-risk high-reward trade setup opportunity in my opinion. My trading software helps me with that. Check my stop-loss, it’s very tight. Check the take profit areas, they provide a 3:1 plus reward risk ratio that I’m looking for. Long or short, good or bad, right or wrong, I stick to my system and I stay out of financial trouble.

Sell Short Devon Energy – Ticker DVN

Sell Entry: 65.44 to 62.20

Stop-Loss: 66.75

Take Profit Areas: 58.96 to 52.48, 49.99 to 48.11, 46.36 to 44.62, 37.54 to 36.13

Devon Energy Profile

Devon Energy Corporation, together with its subsidiaries, primarily engages in oil and gas exploration, development, and production; the transportation of oil, gas, and natural gas liquids; and the processing of natural gas. The company owns oil and gas properties principally in the Mid-Continent area of the central and southern United States; the Permian Basin within Texas and New Mexico; the Rocky Mountains area of the United States; the offshore areas of the Gulf of Mexico; and the onshore areas of the Gulf Coast, principally in south Texas and south Louisiana. It also owns oil and gas properties in the provinces of Alberta, British Columbia, and Saskatchewan, Canada. In addition, the company owns properties located in Azerbaijan, Brazil, and China. Further, Devon Energy's marketing and midstream operations include the marketing of oil, gas, and natural gas liquids, as well as the construction and operation of pipelines, storage and treating facilities, and gas processing plants in North America. As of December 31, 2008, the company had proved developed reserves of approximately 1,934 million barrel of oil equivalent. Devon Energy sells its gas production to various customers, including pipelines, utilities, gas marketing firms, industrial users, and local distribution companies; and crude oil production to refiners and remarketers. The company was founded in 1971 and is based in Oklahoma City, Oklahoma.

Click here to review and trial the Trading Software we used in determining our short position on DVN.

Click the Devon Energy Stock Chart for a larger view.

Devon Energy Stock Chart