RE:what now????
Here is my take on the spike down. ECA has now beaten FIVE quarters in a row. The spike after earnings was caused by a short covering rally. Big money is made rotating this at between 17.50 and 19. Even a 50 cent move down can be a 2 bagger in a tight option contract. I say this, a stock NEVER moves when u expect it, either up or down.
This stock is quality and with 5 beats in row its on the radar of alot of people. CHK is a total POS but its rallied hard because it has Icahn and fellow hedgies " pushing it ". Dont get me wrong , I own CHK also but have liquidated 80 % of my position. Its no where near the quality of ECA. But it has hedge fund popularity.. The reason why ECA has beaten 5 times in a row is that they have skilled people, adept management, superior hedging and extreme cost competitiveness. Its next run will take it to 21. At 21 it will do one of three things, retrace back to 19.75, or re-trace to 20.50. Or it might just run to 22.
Stocks RARELY move when u expect them to. I told people ot keep an eye on AA in late September and felt it was poised to break thru. Then early October as stock was at 8.40 DOOSH BANK rated it a SELL and downgraded it to 5. My 9 dollar calls would have been in the money but the downgrade took it to 7.90. At that point I loaded the boat with april 9 calls. Then earnings came out Oct 9 and they were a big beat. The stock BARELY registered despite the big beat.IThen two weeks later it went from 8.64 to 9.63 intra day breaking a 52 week high on 5 times the volume. Thats how stocks move. When a company has a big beat, as in case of AA , or ECA as of late, make no mistake it is DULY NOTED,. In the case of AA the day before the move it closed lower, had paltry volume and traded little in the pre -market. Those are the days to look for a stock to break out. "Telegraphing " a move allows shorts to ready a position , even to naked short to put the wall up to cover.
Ditto for DRYS after least earnings report. Also for NBG. Great earnings, minor pop, then major PLOP, followed by giant POP. I see the break out happening and these moves are old hat. However, this stock is soooooooooooooooo undervalued, its management so capable as of late, and with 27 properties , liquidation of a few put into more oily plays can generate mucho returns. The thing about ECA is its by far the best take over candidate for a visionary player who seeks a stable 50 to 75 year supply. It is the type of stock that can be taken over any day and not at a miniscule premium because they have time on their side, strong balance sheet, low costs, and superior hedging .
Dont panic , add on weakness, hold a core position, in my case 70 % and trade the core. I could make more trading the trend but I am a high believer in this as a take out because its a "Canadian " company with large US holdings which makes it politically less threatening than if a player would go after a Devon, Cabot, or a Chesapeake.
On anotheR POINT DRYS up 10 % yesterday, GNK up 20 % in one day. Stocks had re-traced severely off their recent highs, people thoUGHT " falling knife " stay away, and when you least expect it brutal reversal the other way. Market makers, hedgies, and people with more moolah than VPO move markets. They trade pops and drops and that is why the VPO motto is that PROFITS ARE A GIFT IN VOLATILE MARKETS SO TAKE WHEN GIVEN