Oil Returns As Major Indicator of Capital Markets?

crudeoilMitchell Clark: The lull between earnings seasons will soon be here and with the absence of corporate results, trading action can get choppy.


It’s still important to follow transportation stocks and the NASDAQ Composite. Transportation stocks have a tendency to lead the broader market, and outperformance from the NASDAQ Composite (compared to the other major indices) signals speculative fervor remains.


The one commodity that’s very much back in play in terms of a reflection of investor sentiment is oil. West Texas Intermediate (WTI) has come back to the $100.00-per-barrel level on what looks like speculative betting on better economic growth this year.


There were actually quite a few disappointments in big oil’s recent financial results and production is definitely an issue. Both large-cap and small-cap oil stocks have not seen their share prices rise commensurately with oil prices, but some value is finally appearing in this sector.


One company that we looked at previously is Kodiak Oil & Gas Corp. (NYSE:KOG). This is a Bakken oil play that, until recently, was expensively priced. (See “While Few See It, This Stock Sector Is Getting Risky.”)


Kodiak expects to produce 42,000–44,000 barrels of oil equivalent per day (boepd) this year, which represents about a 45% gain over last year. The company’s stock chart is featured below:


Kodiak Oil and Gas Corp Chart


Chart courtesy of www.StockCharts.com


Kodiak reports its fourth-quarter and year-end financial results at the end of this month. Junior oil companies may see their fourth-quarter numbers affected by the severe cold in terms of the number of well completions.


(...)Click here to continue reading the original ETFDailyNews.com article: Oil Returns As Major Indicator of Capital Markets? [Chart Industries, Inc., Kodiak Oil & Gas Corp (USA), PetroChina Company Limited (ADR)]
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