One clear outperformer through all of this has been Markwest Energy (MWE)
Its been no worse than sideways with the occasional spike dow, and those spikes down have been good entry points. If we are on the road to recovery Markwest should be among the first to breakout. That would mean a close above 38.
The mlp index did well yesterday with a nice 2 point gain and our little base is holding nicely. Respect the "doji hammer" is the battle cry and we have seen a very short term trend change since the hammer appeared nearly 2 weeks ago. We are about to challenge the 34 day moving average which is in decline of course and that sits just above where we are right now. The top of the base remains 275 so we have some challenges ahead.
Copano (CPNO) has been a sideways performer in this mess with a bit of a downward bias. We may be in a bottoming area in here for this one as well.
Energy stocks continue to have a tailwind this morning with the trendline rally in crude continuing this morning; up 1.50 as of this post. Nat gas is higher by a few pennies as well.
Many of you have been wondering why all the selling in Targa Resources(NGLS) lately coupled with heavy insider buying. We haven't resolved the mystery of who the seller is but Citigroup is upgrading the stock to a buy from a hold this morning and setting a 27 dollar target.
Nothing else happening this morning so lets see if we can make it 3 up days in a row.
joseph cioffi's Source Page - Associated Content
4 comments:
Let's see if the NGLS seller shows up again today. Upgrades have been prime opportunities to sell the last few months...
From the Citi report on NGLS:
Recent Weakness NOT Fundamentally Driven: Units of NGLS have been weak over
the last two trading sessions - falling nearly 4.5% on above-average volume.
In our opinion, this weakness is not fundamentally driven. Rather, as we
have articulated before with respect to the broader MLP space, we believe
much of the weakness has more to do with forced liquidations by institutional
investors running leveraged trading books. As credit conditions have
worsened, institutional investors have found it difficult to maintain
leveraged positions resulting in a broad-based sell-off in the space. NGLS
has a large institutional investor base, which we believe might partially
explain recent weakness. While a further unwinding of a troubled position is
possible, NGLS appears fundamentally attractive and we suggest long-term
investors begin establishing a position near current levels.
Q. What of Keynes's warning about the tenacity of the market's irrationality outlasting one's funds or investment horizon. How do you deal with that?
A. Great question!
If I own companies that pay dividends and grow earnings I'm compensated for the wait. Dividends provide a real time payments, where earnings growth makes companies more and more valuable, compressing the P/E under the stock.
This is a reason why I don't use leverage. Leverage compresses the time of your bet. Even if you are right on undervaluation, leverage may kick you out of the position before your proven right. To some degree this is what happened to LTCM, they were right on the arbitrage but because of the high leverage they did not survive to see themselves being proven right.
One interesting thing to watch is the "second tier" MLP's: XTEX, TLP, MMLP, etc. They have not recovered at all. When we start to see them move, then the rally will be in full swing.
Great trading by the ass dumping NGLS yesterday, he left a few hundred grand on the table so far.
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