SouthWestern Energy Co. (SWN)

I just recently bought OCT 40 PUT options on SWN.  Technicals show it dropping off the rictor scale.  My instincts were right, but now I am in my second PUT feeling even a bigger sell-off is going to happen.  Am I wrong I think?  Did the support finally hit?   3 peaks going down, will the trend keep going up now?  SWN follows very closely to EOG Resources (EOG).  If $64 for Crude Barrel Inventory is the support price that “keeps the oil industry profitable” then I should be buying CALLS right now.  I still feel oil has a way to go down unless a swarm of buying persists this week.  September technically being a sell-off month going into October.  Oil is still at all time highs and I believe it is running out of steam.  I could be wrong and I will know by the end of this week of Sept.

SWN Daily Chart showing PUT trade in September 2006.

Currently I know Oil Holders Investment Trust (OIH) shows a support level at around $125 a share, and with todays rise of 5% across many energy sector stocks it makes me wonder if we are about to go for an upward ride.  Remember the energy sector is down 7% right now which could be between 5-20 pts depending on which stocks you follow.  Right now energy looks like a bargain at discount lows, but lows can go lower.  In the next fews days I’ll re-comment on this post to make my decision.

My OIH price support analysis at $123.  I was right.  Bounced all the way up to $140.