Energies Rally On Commodity
Shares in natural gas companies got a
lift Tuesday from natural gas prices, enabling a number of stocks to break out
of bases.Â
As TradingMarkets futures editor Marc
Dupee points out in his Futures
Recap, the December natural gas made a new high on the strength of a
cold Thanksgiving forecast in the Northeast, robust demand and Middle East
upheaval.
Turning to the stocks, Coastal
Corporation
(
CGP |
Quote |
Chart |
News |
PowerRating), a diversified energy holding company with extensive
natural gas operations, jumped 4 3/8 to a new high of 82 1/16, clearing a
nine-week flat base as trading activity rose 58% above 50-day average
volume.Â
All charts in this commentary use a
logarithmic scale. Daily charts display 50-day moving averages of price (in red)
and of volume (in blue). Some daily charts may also display a 200-day moving
average (in black).
You saw a nearly identical move on
still greater volume in El Paso Energy Corporation
(
EPG |
Quote |
Chart |
News |
PowerRating), which is merging
with Coastal.
Lucent Technologies
(
LU |
Quote |
Chart |
News |
PowerRating) fell 3 3/8
to 17 9/16 on nearly triple normal volume. Before the open, the telecom gear
maker said it might have to restate its Sept. 30 Q4 revenue by $125 million to
the downside. The company said it may have to pare quarterly operating net by 2
cents a share from 18 cents.
The stock is a potential short
candidate, depending on its subsequent trading behavior. For an introduction to short-selling
patterns, see my lessons Sell
‘Em Short: Three Patterns For Bears and Shorting
Down Gaps.
All stocks are risky. In
any new trade, reduce your risk by limiting your position size and setting a
protective price stop where you will sell your new buy or cover your short in
case the market turns against you. For an introduction to combining price stops
with position sizing, see my lesson,
Risky Business. For further treatment of these and related topics,
check out the Money
Management area of TradingMarkets’ Stocks Education section.