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I've bought APA again. I know the company pretty well. That marks the 4th time I've bought low. And patiently waited. Three previous times it worked out great. This is not a stock that will show up on your text book screens. Accum\Dist rating alone is D-. But check it out. Well run company. Diversified around the world.
Transocean (RIG) is an excellent company, with HQ in Switzerland. Yes, it's a murky business, this BP oil fiasco, but I have a hunch RIG is well oversold. I'm in.
It's going to be very interesting, what with this drilling ban. Halliburton (HAL) has already announced exit plans from the Gulf. I just wonder how long before the Gulf roadside "Damn BP!" signs will be replaced with "Drillers, please come back!" There are thousands of jobs on the line in the Gulf States.
I can see the 33 rigs in the Gulf disappearing quietly, and not bothering to come back. Not with this administration, anyway. The joke in the Gulf is: "We know he can walk on water; can he walk on oil as well?"
I traded calendar spreads in APA for the feb mar and apr cycles and it behaved pretty well. The underlying was in a fairly tight channel around 100 and vols were in the 20's. In the last 5 weeks it dropped below the 40 week ma and volatility shot up through the 30's and into the high 40's. Currently the 20 day iv and the 30 day historical volatility are both at 45 as APA has been making multiple standard deviation moves. I want to see the iv come back down into the 20's and not see any multiple standard deviation moves for a few weeks before going back in. Earnings are estimated Jul 29 before the open so it may be a good vehicle again for the August expiry. At 125,000 contracts as average open interest this is a decent vehicle.
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