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Option Millionaires was started in February 2008 to provide traders with information about option trading. Led by three career option traders, whose pseudonyms are JimmyBob, UraniumPintoBeans, and Vantillian, they started one of the most popular option trading communities on the web. Now, Option... More
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  • Cabot Oil & Gas (COG) – Technically Ready For A Breakout 0 comments
    Dec 26, 2012 3:22 PM | about stocks: COG, XLE

    Good afternoon everybody! Hopefully, everyone had a wonderful holiday and is ready to get back to this confusing market. The fiscal cliff has once again taken the front seat, but the technicals still call the entire ordeal as a non-event.

    The state of the market in the short term, however, is still vulnerable to an overbought downswing, which could last until early January. During this downswing, we should look to buy stocks that have been relative outperformers, which would be expected to continue outperforming into the next rally.

    One stock I found, Cabot Oil & Gas (NYSE:COG), fits this criteria. The energy sector, as a whole, tends to exhibit similar behavior. During bull markets, the sector is relatively flat until inflation starts to become a problem. Once inflation kicks in, the sector shoots off like a rocket. Watching bond prices, it looks like this inflationary time period is about to start.

    COG, on the other hand, has outperformed the market for years, even when the energy sector was underperforming. Therefore, in a technical position to break out in the short term, and an economic position to outperform in the long term, COG's a buy.

    To see the video analysis, including price targets, entry points, and stop levels, click here. Remember to switch to full screen HD mode for the best viewing experience!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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