Wed June 28, 2017
From Contango to Backwardation
I have been suggesting that energy might be, despite what the headlines suggest, slowly turning up.
Our last post looked at the prediction of a Norwegian billionaire who is buying more VLCC Very Large Crude Cargo ships with that expectation.
Here are some early warning indicators.
Bullish Percent Energy Stocks
BPENER has pulled over its 50day MA, the first time since November a year ago, and the first time since it fell below in January.
MACD is rising, the histogram has turned positive, and the relative strength at top is over 50.
USO
USO is breaking over its 50 bar MA on the two hour or 240 bar chart. MACD is up and PMO is approaching the zero line.
RIG Transocean
RIG is in the same situation. It is always hard to call a bottom early. But the stats on RIG here are interesting.
It is trading for 21% of book value which is 8.37 / 40.67
Current ratio is 1.99 which is current assets to current liabilities
$3 billion in cash in the bank.
Share price is up 3.72% today.
RIG actually had $778 Million in net income for FY 2016
RIG had net cash flow overall of $713 M in 2016 with a whopping $1.911 billion from operations
NO it is not paying a dividend
Cash per share is $7.91 cents
The hall mark of the end of a bear market occurs when investors sell perfectly good companies making money because the stock price is still falling.
Is that the case for RIG?
AMLP had a nice rally on the 240 bar chart today as well
A falling dollar tends to be suportive to commodity prices, and oil priced in dollars.
UUP
UUP is the ETF for the US Dollar, still falling, treasury yields and foreign markets are up, as is the oil price
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