Timing in oil sector can make or break you. If you want to make money in the stock market educate yourself and become very objective and learn to time the markets correctly. There is nothing like buy and hold long-term investors unless you are very young and time is on your side and you don’t want big returns in short term.
The oil sector is very complex with massive fluctuations. Everything depends on the oil prices and there are so many factors that influence oil prices. I think the oil sector is changing very fast and will be different in 10 years when combustion engine restrictions are imposed in many cities and countries. Things can change earlier if there is a bigger break though in car batteries. Some of the institutional investors have refused to invest money in oil. The flow of money is reducing in the sector so the level of investments will drop too and the supply may be impacted.
While investing in the oil sector one has to see and understand the large picture of the oil sector. I consider Oil as a rotating sector. Sell and get out in a declining trend and when the time is right and there are indications of reversal like there was time to load up when all oil stocks were destroyed and priced for bankruptcy.
The shareholders that were fully invested and did not get out in time and could not reload or average down at the bottom because they were sitting on huge losses or did not have cash did not benefit from huge lifetime opportunities in the oil sector. Swings in stocks were massive. Some stocks have rebounded back 5 to 9 times from the bottom. Some long-term shareholders are still sitting on huge losses when others had timed the market and have made a fortune. You don’t have to catch the bottom or the top just the part of the trend in time. At times it requires courage and understanding of the commodity cycle.
Staying with the trend and commodity cycle is important and so is managing exposure. One should learn to benefit from them and have a plan. There are quite a few techniques.
Eric Natull Indicator : E. Nutall is a smart professional investor in the field of oil. He is knowledgeable and understands the sector and has access to more research and contacts with Oil CEOs. He is better informed than most and especially retail investors. Because he has a decent amount of funds and buys and sells oil stocks so one needs to follow him too but carefully. He buys and sells a decent number of shares so he impacts the share price in short term. The impact on small float stocks is huge.
The problem with Nutall is that he has his own agenda and he will always pump oil and the stocks that he has already bought. He will talk selectively about the factors that help and promote his agenda and would omit to mention the shortcoming. He paints an exaggerated bullish picture that benefits him. He will continue to pump oil sector even when it is time to exit the oil sector. His livelihood depends on a bullish outlook for oil.
He will never bash oil and the stocks that he owns and finds the weakness in the stocks that he does not own. So when listening to him you should discount some of the exaggerations. He is a trader he is in and out of stocks constantly and will change his tune often.
He makes big mistakes too. Not too long ago he was heavily invested in US oil stocks that did not do well. The pumping on the Canadian channel did not help and his selection of stocks did not work out. He is now mostly in Canadian stocks.
Nutall indicator can be used to our advantage and one should benefit from his research, One should try to buy these stocks before he pumps them. You can find his top 10 stock list in the fund prospectus on the website. Track his holding and when the size of the holding drops or it is all gone then it means he has sold it. If a new stock shows up then he has added a new position and will be pumping his top holdings. He is always rotating.
He exploits and uses the market call to his benefit. You have to be smart enough to figure out the Nutall indicator and use it to your advantage.
Learn to perform proper DD and fundamental analysis. Look at debt to cash flow and debt ratios. The decline rate of the oil company. Cost of production and the current oil prices and the size of the hedges and their prices. Learn about the stock you are invested in. You should know every weakness about it.
Learn technical analysis: Moving average gives you the tend of the sector and stock. There are all kinds of other indicators. RSI is my favorite. Gives overbought and oversold signals. Simple and very reliable.
The reason that the stock did not close higher than $2.50 even the stock hit $2.60 because JP Morgon dumped 200000 shares in the last 40 minutes before the close. He started selling from $2.57 to $2.49
House Positions for C:CJ from 20210326 to 20210326 | 79 CIBC | 1,761,279 | 4,336,184 | 2.462 | 1,242,310 | 3,065,848 | 2.468 | 518,969 | -1,270,336 |
| 1 Anonymous | 1,883,152 | 4,638,538 | 2.463 | 1,463,243 | 3,602,169 | 2.462 | 419,909 | -1,036,369 |
| 13 Instinet | 120,200 | 285,950 | 2.379 | 5,000 | 11,900 | 2.38 | 115,200 | -274,050 |
| 39 Merrill Lynch | 274,977 | 678,374 | 2.467 | 182,099 | 451,711 | 2.481 | 92,878 | -226,663 |
| 74 GMP | 28,900 | 72,957 | 2.524 | 0 | | 28,900 | -72,957 |
| 85 Scotia | 280,497 | 691,895 | 2.467 | 263,951 | 649,575 | 2.461 | 16,546 | -42,320 |
| 124 Questrade | 62,479 | 153,022 | 2.449 | 49,177 | 120,266 | 2.446 | 13,302 | -32,756 |
| 76 Industrial Alliance | 12,200 | 31,487 | 2.581 | 0 | | 12,200 | -31,487 |
| 88 Credential | 67,600 | 170,369 | 2.52 | 57,400 | 137,724 | 2.399 | 10,200 | -32,645 |
| 80 National Bank | 168,378 | 415,428 | 2.467 | 160,634 | 395,228 | 2.46 | 7,744 | -20,200 |
| 70 Manulife | 7,400 | 18,352 | 2.48 | 0 | | 7,400 | -18,352 |
| 19 Desjardins | 37,789 | 91,801 | 2.429 | 33,272 | 82,011 | 2.465 | 4,517 | -9,790 |
| 72 Credit Suisse | 4,300 | 10,189 | 2.37 | 0 | | 4,300 | -10,189 |
| 143 Pershing | 2,000 | 4,660 | 2.33 | 0 | | 2,000 | -4,660 |
| 28 BBS | 1,400 | 3,537 | 2.526 | 0 | | 1,400 | -3,537 |
| 212 Virtu | 125 | 286 | 2.288 | 177 | 446 | 2.52 | -52 | 160 |
| 59 PI | 0 | | 3,000 | 7,095 | 2.365 | -3,000 | 7,095 |
| 62 Haywood | 0 | | 5,000 | 11,400 | 2.28 | -5,000 | 11,400 |
| 22 Fidelity | 0 | | 5,000 | 12,750 | 2.55 | -5,000 | 12,750 |
| 89 Raymond James | 19,247 | 47,203 | 2.452 | 34,000 | 79,900 | 2.35 | -14,753 | 32,697 |
| 57 Interactive | 3,900 | 9,836 | 2.522 | 23,457 | 59,650 | 2.543 | -19,557 | 49,814 |
| 5 Penson | 32,431 | 79,921 | 2.464 | 58,020 | 142,526 | 2.456 | -25,589 | 62,605 |
| 14 ITG | 6,000 | 14,974 | 2.496 | 36,100 | 90,907 | 2.518 | -30,100 | 75,933 |
| 65 Goldman | 0 | | 43,700 | 107,068 | 2.45 | -43,700 | 107,068 |
| 53 Morgan Stanley | 0 | | 96,070 | 231,833 | 2.413 | -96,070 | 231,833 |
| 9 BMO Nesbitt | 285,915 | 702,619 | 2.457 | 455,816 | 1,130,108 | 2.479 | -169,901 | 427,489 |
| 33 Canaccord | 24,900 | 57,921 | 2.326 | 209,114 | 511,577 | 2.446 | -184,214 | 453,656 |
| 222 JP Morgan | 0 | | 200,000 | 503,669 | 2.518 | -200,000 | 503,669 |
| 2 RBC | 356,493 | 880,357 | 2.469 | 567,995 | 1,400,874 | 2.466 | -211,502 | 520,517 |
| 7 TD Sec | 771,915 | 1,898,425 | 2.459 | 1,018,942 | 2,488,046 | 2.442 | -247,027 | 589,621 |
| TOTAL | 6,213,477 | 15,294,285 | 2.461 | 6,213,477 | 15,294,281 | 2.461 | 0 | -4 |