Energy Inner Circle

The combination of a continuing irrationally-driven selloff in crude oil and an equally panic-stricken dive in the Chinese stock markets has placed one of our Portfolio members in a vulnerable situation.

China Petroleum & Chemical Corp. (NYSE:SNP) has weakened 13.8% for the month, 5.4% of that in the last two days. The meltdown in Chinese indices on Monday, in which the markets declined 8%, isn't helping.

SNP is nowhere close to its trailing stop. As of close yesterday, it is priced at $73.60 (down 16.7% since its introduction).

 
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Categories:    Energy Inner Circle

The reversal of fortunes late yesterday in the trading session was welcome. Unfortunately, three of our holdings hit their stops. Had you been following our regimen, you are already out of these positions. If not, sell this morning.

We had replaced the trailing stop with a higher hard stop for Clayton Williams Energy Inc. (NYSE:CWEI) and Gulfport Energy Corp. (NasdaqGS: GPOR) only yesterday morning. The move placed a more limited exposure to downside risk. A few hours later both stocks broke down through those stops set at $51.50 and $37, respectively.

CWEI continued to decline for the session and ended at $51.23. Selling when the stop triggered resulted in a 20.1% loss; selling at open today puts it at 20.5%.

 
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Categories:    Energy Inner Circle
Jul
07
2015

Sell CLR

In an alert yesterday morning, I recommended replacing the trailing stop for Continental Resources Inc. (NYSE:CLR) with a hard stop at $37.50. As the heavy pressure on oil intensified in the afternoon, that stop was triggered.

If you have been following our stop regimen, you should now be out of the position. If not, sell today at open. The hard stop actually minimized the loss by a full 10% from the value initially dictated by the trailing stop.

I will continue to revise stops where necessary to limit the down side risk exposure as we move through this latest round of sector volatility.

 
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Categories:    Energy Inner Circle