Energy Report Weekly

Crude Oil continued its extended rally this past week as traders continue to focus on the geopolitical issues as opposed to…
Matt Odom
Odom & Frey Futures & Options
904-247-0232 intl
866-636-6378 toll free
matt@odomandfrey.com
www.odomandfrey.com


the traditional supply and demand reports from the DOE. Iran continues to be a thorn in the side of the rest of the west as they refuse to squash their nuclear research program. This has the bears licking their wounds as the reliance upon inventories and current supply numbers has lead them down an expensive path.
The technical picture is shaping up nicely for the bulls also, as this past week provided a couple of pushes through key resistance I mentioned last week. These are definitely buy signals but the ability to buy on dips and place a relatively prudent stop is a foregone conclusion. Protective sell stops need to be in the 6300 range which is roughly $3000 or more in risk for any likely entry point over the next week or two.
My estimation is that this market needs a moment to cool if not retreat somewhat in order to make the necessary push through the all time high of 7111 for the March contract. This could happen in short order or it may take a few weeks. Either way, if you want to make a play here it would be wise to try a 6-8 week near the money option spread risking $500- $750 at the most.
Heating Oil broke out above 1900 and proved that the base commodity still rules when it comes to pricing the products. Unleaded saw similar action as it also continues to build in supply while prices rise.
The Nat Gas market made its way to the mid 9’s again this week and I suspect it has the momentum to stack a couple more dollars on in the next few weeks. This market went down too fast for too long and is due for a sustainable run to the upside for the next few weeks. Matt Odom 1-20-06
Matt Odom
Odom & Frey Futures & Options
904-247-0232 intl
866-636-6378 toll free
matt@odomandfrey.com
www.odomandfrey.com

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