Canadian Energy producer EnCana Corporation (NYSE:ECA) led by example for the second straight day as its chart climbed a hill with great determination Thursday and Friday.
The surge in natural gas has been very good for income generating energy producers. Not only is The Little Energy Stock That Could up 10% in the last 2 days, it yields more than 3.5%. Mama would be proud, and it might be because EnCana hangs out with the right crowd of income-generating energy-producers: High-yielders CNOOC (NYSE:CEO), Penn West (NYSE:PWE), Talisman (NYSE:TLM), Statoil (NYSE:STO), Seadrill (NYSE:SDRL), and Murphy Oil (NYSE:MUR) all climbed their own hills of more than 2% Friday.
Unlike some other big movers the last couple of days, EnCana had a real business catalyst to move, with gas prices spiking so much. That's in sharp contrast to the pole-axing some stocks got lately, seemingly to manipulate big option price swings as options expired after Friday. Yep, the move was real, and for the June 16 $20 call option holders it was a little unreal for a second straight day: (Source: Etrade)
As most options expire after the third Friday each month, this a recurring pattern of wild swinging in options with strikes that go from in the money to out of the money or vice versa. The Little Energy Stock That Could had a nice payoff in this call option, but if the news was bad instead of good the pain could have been as bad as the pleasure was good.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.