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Hedging bets on energyThere's a lot of action in energy stocks today as Donald Trump announced on Twitter that Saudi Arabia and Russia are closing in on a deal to cut production by 10-15 million barrels per day. This is going to be challenging, since the two countries only produce 23 million barrels per day between them, so they'd have to cut their production in half. Shortly after Trump's tweet, a Russian spokesman announced that in fact no specifics have been discussed, so it seems that Trump's tweet was very premature. Nevertheless, there's some reason to think that Saudi Arabia, at least, will cut production. Last night, Senator Kevin Cramer said he had told Trump that "we should not keep armed forces in Saudi Arabia protecting their oil assets while the Kingdom declares war on our oil producers." In other words, Cramer told Trump to twist the Kingdom's arm by threatening to withdraw US troops amid a rebellion in Yemen and threats from Iran. Assuming that this is, in fact, the strategy Trump is using, I think it's very likely to succeed whether Russia plays ball or not. Here are a couple other bullish signs for energy: the US is addressing the storage shortage by renting out space in the strategic oil reserve to private companies, and crude inventories are falling in China for the first time in months because refineries have reopened there. On the other hand, there are bearish signs too: Rystad Energy predicts a large decrease in energy demand in April, and today's jobless claims report would tend to confirm that. 6 million jobs lost means the economy is in a very bad place, and the weakening of demand may persist long after lockdowns are over. It's hard to resist taking some positions in the energy sector with so many bargain dividends available, such as the nearly 10% dividend on Exxon-Mobil. (And Exxon should have the cash to be able to sustain that dividend even if oil prices remain weak.) However, what if oil prices continue to fall? For that scenario, it's useful to have a hedge. I am hedging my Exxon-Mobil position with an oil tanker stock, specifically Frontline, Ltd. (FRO). Tankers and producers have been moving opposite each other, with tanker stocks gaining when oil prices fall and falling when oil prices rise. That's because weak oil prices lead producers to ship their oil to storage locations, which increases demand for tankers. Frontline has a nearly 20% dividend yield right now, so I should make money from dividends on both sides of this trade, regardless of what happens to prices. I also have a smaller hedge in USO, an ETF that holds physical oil. This is because rising oil prices may not always be good for Exxon-Mobil. What if oil prices rise because big producers like Exxon have cut production? Then both my Exxon stock and my Frontline stock would fall even as physical oil prices rise. So I want to have some physical oil in my portfolio too, to offset the effects of any Exxon-Mobil production cuts. Unfortunately there are no dividends from USO, which is why I have only a small hedge here.
NYSE:XOMLong
by ChristopherCarrollSmith
26
Watch this critical levelIt sure looks like the S&P 500 is getting rejected from the 20-day exponential moving average (EMA) today. With support at the 10-year trend line and resistance at the 20-day EMA, the price will get squeezed between the two in the coming days, and we should see a breakout one way or another. I tend to think the breakout will be downward. Futures markets are predicting that S&P 500 dividends will fall 30% this year, which means that the underlying value of S&P stocks continues to erode even as the price has been rallying. The price is only about 18% off its high, so it looks to me like the dividend drop may not be priced in yet. If you're going to take a short position, you could enter near resistance at the 20-day EMA and set a stop loss just above it. Or you could wait for the 10-year trend line to break.
SP:SPXShort
by ChristopherCarrollSmith
4
CRF longThis stock is usually traded at a good volume, and with minor daily changes, the risk is considered to be low. Monthly dividends with total Dividend Yield 19.24 per year is very attractive. Morningstar Rating is: Overall 4 out of 5 stars Out of 7 funds out of 7 Large Blend funds 3 Year 3 out of 5 stars Out of 7 funds out of 7 Large Blend funds 5 Year 4 out of 5 stars Out of 7 funds out of 7 Large Blend funds 10 Year 5 out of 5 stars Out of 7 funds out of 7 Large Blend funds This table displays the fund's top 10 holdings. Security Name Microsoft Corp Alphabet Inc Class C Amazon.com Inc JPMorgan Chase & Co Visa Inc Class A Procter & Gamble Co Adams Diversified Equity Fund Apple Inc Merck & Co Inc The Walt Disney Co
AMEX:CRFLong
by allaran2001
4
Alaska Airlines looks ready to pop this weekAlaska is rated the second-best Airline, according to the Wall Street Journal. It is extremely undervalued, with a PEG ratio of about 0.5. News has been extremely positive for Alaska lately. In terms of technicals, Alaska looks to be right above a volume support and ready to bounce. Another way to play Alaska earnings is to diversify risk by buying the JETS ETF. Even if it misses its earnings target this week-- and it has a history of beating rather than missing estimates-- it might get a bump from raising its dividend. Alaska was one of five companies named in a Barrons article today titled "Comcast, Valero, and 3 Other Companies Expected to Increase Their Dividends Next Week." Options buyers have neglected Alaska, with most of the open options being puts, but that just means that the bullish fundamentals aren't priced in yet. I will go long on Alaska Monday morning.
NYSE:ALKLong
by ChristopherCarrollSmith
Ross Stores valued fair to rich$ROST shows a tremendously steady upward trend over the last 6 years. Currently trading more to the upper end of the trend channel. Also my dividend-radar shows that there is no "value" to be had here. Currently for me only a hold and if it moves to the 120-126 area within the next 3 months I will shed some of my position. In the opposite direction it will be more interesting to accumulate if the price range between $90 to $80 is hit. This would imply a drop of roughly 30%
NASDAQ:ROST
by cmpndng
investing in BAT?Last week i installed the Brave Browser and i need to say ... wow, interesting. Getting rewards for your attention. its direct, it's clear and simple. the idea is based on BAT and BAT is based on Ethereum. but why crypto... The Brave Browsers reward system is based on BAT. You surf the net, visiting sites, watch ads and so on. And what i really like is the fact that you earn BAT when you do exactly this, what we do every day. surfing the web. So, somehow it's a kind of dividend, payed to you monthly and you can use them later for something else. Or you simply collect BAT. So i checked the BAT Cryptocurrency. Normally i'm only looking for Companies / Stocks which are in some kind of trend correction and especially arriving the 78.6 / 86 Fibonacci area AND most important form pattern which work as a possible reversal. Because BAT is new somehow, i want to see some longer timeframe, the only source was the BINANCE:BATUSD chart calculated by Trading View. And what i saw on weekly BINANCE:BATUSD was interesting. Last week it formed a nice reversal at exactly 78.6% and it left the downtrend in April by forming a new higher high. And it stopped a the long term trendline. For me an interesting idea and if i use the good old Fibonacci rules a possible investment.
BINANCE:BATUSDLong
by MH77
2
Mastering the dividend cycleECA Marcellus Trust is an example of an extremely high-dividend stock. Because of its high dividend that comes every three months, the stock moves in predictable cycles. The stock gets bought by dividend miners during the lead-up to a dividend, and then it sells off afterward. There are about 61 trading days between ex-dividends. The low typically comes sometime between day 21 and day 41 after the ex-dividend date, and the high comes on day 60. This cycle offers an excellent opportunity to make a fairly predictable profit. Even this last, relatively small upswing was worth nearly 35% if you bought at the halfway point between dividend dates and sold the day before ex-dividend. It's usually a good idea not to actually take the dividend, because the stock will lose more share price overnight than the dividend is worth. (To take the dividend, you have to own the stock at the start of pre-market trading on the ex-dividend date.) It's worth pointing out that ECA Marcellus Trust is a risky stock. Its dividend distributions vary depending on the price of natural gas and the output of the wells. The output of the wells declines about 8% per year, and the Trust itself expires in July 2021, at which point the stock becomes worthless. So you can expect the swings to get smaller over time, and the stock's average share price to decline at an accelerating rate. Still, there's an opportunity here for a well-timed play, and its predictability makes it pretty attractive.
E
by ChristopherCarrollSmith
$IVZ Strategies on a Value Growth StockIVZ has low P/E, D/E, and P/B ratios, despite growing revenue and dividends. Therefore, my 5 year outlook is bullish. I suspect the best times to buy are around a low of $19.40 for a short turnaround, but the price may get as low as $18.58 in as little as 2-3 weeks if the impulse from Jan-Feb echos the latest high. Other possible low points for the suspected echo impulse, using fib levels, are 18.65, 18.93, 19.14, and 19.29. Pyramiding your buys using these levels should give a relatively low average position for long term growth, which can be sold off, probably during the year, for a profit to adjust the weight in the portfolio back to a reasonable level to meet your portfolio diversity goals. Despite the effort in averaging down and out, I do believe it is a worthy strategy to reap greater returns rather than buying once when it looks good. The average price per book value for this stock is less than one and averages greater than 1.65, according to Yahoo. To reach equivalent value if book value remained constant, which it will not, the factor is 1.8x. Earnings are expected to rise, so book value itself will rise over time. Book value has risen 50% in the past ten years, so a 5 year price target given today's suspected low and a 1.2x oversold factor (because who sells at value?) will be 19.40*1.8*1.25*1.2 = $52.38 or about a 170% return on investment, plus another $6 in 5 year straight dividends at $0.30 per quarter. Due to the volatility and bullish/bearish runs with bulls beating bears in the end, this makes a great swing trading opportunity. When the stock trends above 1.67% monthly or 0.38% weekly, the stock is performing greater than its exponential averages: Average Exponential Monthly (%) Growth: (2.7^(1/(12*5))-1)*100 = 1.67% Average Exponential Weekly (%) Growth: (2.7^(1/(365/7*5))-1)*100 = 0.38% This is likely to occur now and less likely over the course of 5 years. Therefore, linear price increments may be more useful in determining rapid growth in earlier stages. In which case, when the stock trades above $0.55 a month or $0.13, the stock is performing better than its linear averages: Average Monthly ($) Growth: (52.38-19.4)/(5*12) = $0.55 Average Weekly ($) Growth: (52.38-19.4)/(5*365/7) = $0.13 Right now, we are in a bit of a bull swing since Dec 24th, as with most (financial sector) stocks. There is some potential to ride this out for a while, so adjust your alerts to watch for the bear once it crosses down on the average expected growths. This stock has a tendency to go up in the early mornings around 10:00AM, so that would be your time to sell if the previous week was low and would not be your time to get hopeful.
NYSE:IVZLong
by ValueMyAsk
NEO Breaks Out On Enormous Volume Pretty self-explanatory. I'm tired of typing for today, so let's keep this short. I bought NEO at 2030 with all my TRX (which I bought much lower). I expect NEO to continue its uptrend for now. We're consolidating nicely and building support in a previous MAJOR resistance zone (in red). If we can hold this area, I expect us to head towards the next targets, in green X's. I'm holding NEO long term. Yes, we can revisit lower supports, but currently price action looks very strong, with volume to support it. We also bounced off a major support in USD value ($5-6). I was looking for a sign of strength after we reached that area, and had been wanting to enter a position on NEO since it was in the $16-30 zone. It looked too weak there so I patiently waited. So far, it was a good move. This is not financial advice. For future reference and educational purposes earlier. -Victor Cobra
Long
by VictorCobra
Not all bonds are declining!EMLC has just experienced a bullish breakout of a wedge pattern. That occurred above support (23.6% retracement of all-time high to all-time low), which lends to the bullish slant. It's also recently tested and held a rising channel bottom and had a bullish breakout in the RSI, further strengthening the bullish setup. Volume has been robust and accelerating, as well, suggesting conviction in the move higher. As rates rise, bonds will obviously fall in value. However, that's not the case everywhere. EMLC primarily owns emerging market government debt (>96% of holdings), along with a few corporate bonds. It invests in debts in the local currency, which reduces exchange rate risks. It has vastly outperformed US government debt with a 1-year return of +11.2%. Compare that to SHY, IEI, IEF, and TLT 1-year returns of -0.1%, -0.41%, -0.54%, and +3.0%, respectively. Not only is the fund experiencing price appreciation, but it also offers a 5.3% dividend via monthly distributions. This is a great place to park cash and achieve some return while market turbulence and volatility prevail. I'm a buyer at current levels, with an intermediate term target of $20.81, the 38.2% retracement.
AMEX:EMLCLong
by EchoAlphaBravo
One to consider for your IRA: AMZAAMZA is a ETF that mainly invests in the energy (mainly oil) industry for high dividends. I see the current drop as an opportunity for dividend investors. Limited partnerships can be tricky at tax time outside a IRA so I only put them there myself. Dropping 3% today. Watch for signs of it bottoming from price action. At a price of 8 it gives a >16% dividend. "The investment seeks total return primarily through investments in equity securities of publicly traded master limited partnerships and limited liability companies taxed as partnerships ("MLPs"). Under normal market conditions, the fund will invest not less than 80% of its assets in equity securities of MLPs in the energy infrastructure sector. It is non-diversified."
AMEX:AMZALong
by goodguy
4