Market convergence…..Bakken divergence.

Posted by bakkenexpert

If you would have looked at all the negative commentary on CNBC today regarding oil, financials and plunging through 12000 , you would assumed all your stocks did quite poorly today. Even oil was stagnant throughout the day with XLE only ending up 0.38%. But today is not like other days… today’s magic word of the day: divergence . One more time: di-ver-gence. Why is divergence important? Because it means that to some degree investors have disassociated broader market trends (including big oil) with bakken related plays. This bodes well for bakken for the remainder of 2008 as I suspect there will be extreme volatility in the market with housing, oil, inflation, geopolitical forces and election hoopla all exerting various levels of pressure.
Lets take a snapshot at what bakken plays did today while the dow was testing 3 month lows. CLR, EOG, WLL and XTO up 1-2% (good), NOG up 12% (great), KOG up 30% (priceless).  However,  with great gains comes great responsibility and we’ll see if our Bakken plays can sustain the momentum over the next few days and whether they can resist the urge to gap down.

Symbol Last Trade Change Volume Intraday ^DJI 4:04PM ET 12,029.06 131.24 1.08% 212,900,502 ^IXIC 5:16PM ET 2,429.71 28.02 1.14% 0 CLR 4:01PM ET 73.85 0.55 0.75% 1,169,616 EOG 4:02PM ET 133.03 1.02 0.77% 2,636,795 NOG 4:00PM ET 15.84 1.70 12.02% 1,806,783 KOG 4:00PM ET 5.05 1.21 31.51% 9,681,693 KDKN.OB 3:58PM ET 2.77 0.03 1.09% 119,827 BSIC.OB 3:58PM ET 2.56 0.10 4.07% 73,244 XTO 4:05PM ET 71.61 1.63 2.33% 9,231,836 WLL 4:03PM ET 106.15 1.86 1.78% 872,862

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Daily Roundup (6/12/2008) – Bakken behaving badly

Posted by bakken

Today “pureplay” Bakken related stocks shed roughly twice as much as larger counterparts such as XOM & CVX on moderate volume. For example, KOG, NOG and CLR were off 2.5% or more while XOM & CVX were off closer to 1.5%. In unstable markets, i think this is par for the course as most of the intrinsic value in the Bakken plays have not been realized and weak hands get shaken out if momentum seemingly shifts. Depending on what direction oil takes from now until July 4th, we could see a heck of volatilty in our respective Bakken portfolios as many positions have gone up 20-40% in the last 8 weeks. I’m going to hedge a bit here until things stabilize, but I am still bullish in the mid term.

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