Oil market is close at bottom
Posted by Frugal on October 13th, 2006
I believe the bottom of oil market is right here around $57. Consider buying any of the beaten oil stocks, such as MRO, VLO, COP, or ERF, PWI for Canadian Royalty trusts, or oil-related index OIH, XLE.
One may wait for another pullback, or if you don’t have any positions, now is a very good time to add some into this market.
Remember to balance your portfolio with different sectors. Without diversification, you will simply be asking trouble (like me, 
, oh, well, just down 10% to 15% overall, 1 to 2 years of my annual savings, or close to an entire year of my salary. Hey, it’s just money. ).
P.S. I wrote this post in less than 5 minutes. Didn’t have much time to even catch my breath. Please see my comments for more details.
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October 13th, 2006 at 11:44 am
Somehow I think we’ll see energy trend upward after the election. Not because of any conspiracy or anything of that nature but usually the month leading up to an election usually produces a calm market.
In addition, we are approaching the winter season so demand for natural gas will begin to shoot up.
October 13th, 2006 at 4:36 pm
Don’t forget about PVX as a good CANROY purchase. PWI has a lot of room to move too. Good call.
-Grant
TheCornerOfficeBlog.com
October 13th, 2006 at 9:59 pm
Dr.Housing Bubble,
Not sure if conspiracy theory is true, but certainly the correction is too deep and too linear. Where is the random walk?
Grant,
Actually there are LOTS of choices. Thanks for the addition.
October 14th, 2006 at 3:47 pm
Thanks for the alert, I bought some more COP yesterday. You seems quite concentrated on energy related asset. Do you mind sharing what eactly you own? Thanks.
David
October 14th, 2006 at 11:35 pm
I own PWI, COP, FDG, PBT, APA, NAT, PRNEX, SJT, BP, MRO, VLO, SSL, BQI, COSWF.PK, OIH, XLE, CHK, IUC.TO, CCJ, PBW, HW, ESLR, U.TO, for energy-related stocks.
Not sure if that is helpful. I am planning to slowly sell my individual stocks and trade in equal dollars in ETF/mutual fund. It’s just too many stocks. I would advise you the same too.
My energy portfolio has not been doing well at all recently. But I think it should be the time to buy more.
October 15th, 2006 at 3:03 pm
Thanks, that’s very useful.
Regards,
David
October 17th, 2006 at 2:55 am
Any particular reason to believe $57 is the “bottom”? Guessing isn’t usually a good investment selection technique in the long run.
October 17th, 2006 at 8:29 am
That’s a good point. From the chart, the crude oil seems to have stablized the falling and making a higher low.
http://stockcharts.com/h-sc/ui?s=%24WTIC
Based on COT data, crude oil should be rallying anytime now.
http://www.buythebottom.com/
Based on all technical indicators, crude oil has NEVER been this oversold. The probability of further fall is quite small.