admin | I’m sort of looking with increasing amazement as the stock keeps on being overbought for quite some time now but refuses to lie down even temporarily in the face of leap-year options expiry. I still sort of expect at least one leap down before the market closes, or at least an attempt at such. However, I’m quite interested to know the opinions of technical specialists here, as I would feel better if we could work some of the overbought condition off before lurching higher. |
Petrovale | STP, without “news”, IOC needs to be red hot over an extended period of time, before it crosses the $66-70 line. The occasional flirt with the OB region in the RSI (4-hour chart) is encouraging, but not yet convincing. I believe on balance volume suggests that the longs are keeping a tight leash on the shorts. Just my two cents. |
admin | I would feel better if we had a few days cooling off though, I have to say. Volume is high, but not exceptional, which doesn’t suggest news in the immediate future, and looking back it invariably sold off in conditions like these sooner rather than later.. But then again, I’m no specialist in TA, and I can’t complain. Perhaps the shorts really are covering in considerable numbers. |
Petrovale | Market is also giving us an exceptional break, after last year’s lousy performance. I think there will be a “make” or “break” moment sometime next week. No claim to expertise over here. Since I don’t have crystal balls, I tend to draw a few graphs every day. Would be more than interested in the opinions of Crooze, Trans, Lib, others. |
trans | Look back and study the period where IOC got to the top of the Ant 2 formation, set casing, and see what happened to the price from then on. If you think the shorts are scared here, just wait til….my guess, in Feb..track the progress reports off IOC website and match the news flow with the price behavior. That’s where the shorts really freak again….imo |
admin | Yes, I understand that. But when it just keeps going up, on moderate volume, even when already overbought it sort of gives you the feeling that the rug can be pulled from under you at any time. I would feel better if we had a few days of consolidation to work off that overbought condition, trans. But perhaps this is one of these cases were TA is of limited use. |
Putncalls | Didn’t we just have 9 months oonsolidation? |
Libtardius Maximus | STP, I understand you’re concern. I’m on the other side of the volume point. I see volume as significantly higher, especially the last three days this week, O/E. Remember last summer when Calio issued his buy one hour before the close the last day of O/E? Volume was 200k when he did it. I’m for setting the T/A stuff aside and see how far the pps can go. |
ValueSleuth | A few observations: 1) The 200-day MA is about to turn upward from $56.06, and keep going upward, as the April 20-mid June prices being replaced were below current levels and generally falling. This is a good level of support. 2) The 20-day MA is about to cross over the 200-da MA at the aforementioned $56.06. This also provides support. 3) The 50-day MA line is at $53.32, and rising, providing the ST ultimate support for any quick pullback. 4) Depending on how precisely one draws it, the rising channel line connecting the early October lows and the more recent December lows is now offering further support just below the aforementioned 50-day MA line. 5) The top of the channel line mentioned above, connecting the September 30 pre-plunge high to the November 22 high, projects to a current upward channel limitation of about 78 and within a few weeks to the ALL-TIME HIGHS in the $83-$85 area. The all-time highs will be MAJOR RESISTANCE. 6) Over the last year, by far the greatest daily volume has been recorded at $60. That level now offers support. 7) Over the last TWO years, by far the greatest daily volume has been recorded at $62. Arguably, we have now exceeded and held that level for 3 days.  For comparison purposes, look at the chart action before/after June 29, 2010 as an under-lay to the current chart action before/after December 20, 2011. Looking at the comparison, you might get an idea of what could unfold with the price action. HOWEVER, there are MUCH MORE POSITIVE FUNDAMENTALS in place now, with pending announcements lined up for several months. What are my conclusions? There is plenty of room for further upside price action within the current channel and pending news announcements that could occur at any time to take the price very rapidly up to the low $80s, where it is highly likely that there will be a pause/pull-back, before some BLOCKBUSTER NEWS underpins a breakout over all-time highs. (My proprietary guess is that this breakout will take the stock to the low $130s, after which there will be a VIOLENT pull-back to retest the breakout over the current all-time highs. I’ll be trading that move.) In the short-term, yesterday I sold Feb 85 covered calls at $1.50 with a semi-outrageous implied volatility of about 100, which has already eroded to 95 and should continue to erode next week, as more options are written following today’s January expiration. Assuming the Feb 85 options expire worthless, that’s an over 2% “dividend” in 4 weeks. I normally buy back the calls after 80% gain has been achieved, possibly allowing a double dip at a lower strike price, depending on the price action, of course. Now, let’s see what plays out with my analysis/scenario. VS |
admin | Well, yes. It’s even more overbought now, but apparently this doesn’t matter, as volume is picking up notably. |
ValueSleuth | Follow up to my January 21 post: Strategy validation? As of early this trading day, the stock price is up about 5%, the implied volatility of the Feb series calls has plunged another 10 points to the low 80s, and despite the price surge, the Feb 85 calls I sold at $1.50 on Friday are now down 27% from sale. Covered call writers might take notice. VS |
admin | Good move, as a friend of mine would say in these kind of circumstances: next round is on you Value! |
admin | So you sell covered calls at the point of maximum implied volatility, or is there any other metric you use, value? |
ValueSleuth | STP, A lot of the timing is a “feel” kind of thing. I don’t have the ability to chart-track implied volatility, so it is mostly a matter of watching what is going on and hitting the buttons when the probabilities are with you. When the implied volatility gets well over 100 AFTER the kind of price move we’ve already seen, there’s temporarily way too much optimism built into the option price. You just want to have a high probability of a 100% profit on a high option sale price. I specifically chose the $85 strike price because it is at/over the all-time IOC price high and I don’t expect a breakout before the mid-February option expiration. I’ve been very conservative with that strike price selection in that I don’t want the shares taken away, nor do I want to have to buy back the options after a near-term breakout over the all-time stoke price high. Everybody has their own preferences of how play these things, so it is a “different strokes for different folks” type of thing. VS |
admin | Thanks Value, I’m just trying to learn from people with better technical acumen, as I’ve been going three years back in the chart and there has only been one occasion where the stock similarly ignored an overbought situation (Dec 2009). |
jft310 | IOC is stupid cheap. IOC Mgt states 30 days of drilling to the top of formation.So thats a plus late Febish.NEC is working on approvals and permits.EWC and Mitsui ready to go. FLEX is ready but others may not want FLEX not sure there.The above events take IOC from stupid cheap to reasonable.Sam Tibb’s model shows $201 per share with very conservative assumptions.I can’t do covered calls here.Post news I can write lots of them |
Petrovale | On today’s 5-minute chart, we haven’t been Over Bought yet… Scam, scam, scam !!! |
admin | SA has a habit of changing the title which comes on a bit stronger than I intended, but it’s been overbought for a week and Tom Crooze argued here last week that we would go back to low 50s unless it closed above 62 (which it did the next day), then it would run-up to 67-8, which is where we are now. Couple of days to work off the overbought situation would be healthy I think. It’s getting a little like the bicycle that has to keep going to keep it from falling over. But any retreat will be small and temporary, unless there is bad news. Needless to say, I think the chances of good news are better  |
Libtardius Maximus | yea stp, I’ve been scratching my head over the title of your article. Thanks for the clarity. |
admin | Well Lib, like I say in the first sentence, still an unrepentant IOC bull.. |
ValueSleuth | STP, With respect to your SA article: Given line up of positive plan-confirming news announcements and the T-2 drilling activity, I think the appropriate chart comparison should be the November 2008 to January 2010 period, rather than the range-bound move to which you compare the present price move. Based on Sam Tibbs analysis, which did NOT include any T-2 valuation, which could dwarf E/A, but could take several wells to verify, the stock price is likely to break out over the all-time highs WITH POWER. As previously stated, my expectation is a significant pause (more time than price) after reaching the low 80s before the breakout. Then a move up to the 130s, followed by a significant pullback to test the breakout. As long as there is no IOC-specific negative news and/or a general market collapse, there is no technical reason why IOC needs to pause now in its steady ascent. VS |
trans | I have posted before on other board, but stochastic, momentum, rsi, and other range defining T/A are useful if a stock stays in a trading range or similar. However, they also have a weakness we have to be aware of, and that is if the stock breaks OUT of that trading range. STP is correct that IOC is in the top of its trading range since early 2011. However, it also may well be that IOC is in the process of breaking up out of that range either here or soon. Looking at my work,(and it isn’t infallable), the weight of the t/a evidence to me says IOC is most likely getting ready to break up higher. Next big objective would be old highs, 80+ where it is very logical to consolidate for a while before breaking to new highs as VS says, if that’s in the cards. My point is STP may be correct, but most investors still don’t recognize there is a mathematical weakness in the range bound indicators that we have to be very aware of, breaking out of the trading range. fwiw |
Palmtok | Thanks VS; I think you’re correct. IOC’s history of hanging in the 60s is that it moves through (up or down) very quickly. Tree also made a good point that we took our fall while press was throwing stories out about problems with the government/Shell. Now that those fears appear to have subsided (but by no means are they yet settled), the pps has recovered to levels of last March (which was about the time Shell entered the picture). So hopefully this means that we are once again more about exploration, SD and FIDs, and as those occur positively, we should see a series of catalyst pops, especially with the float quickly drying up. Of course there is the risk of a pullback, but I see that only happening if things don’t happen as we think they will; and that could get ugly. I’m very optimistic on what will occur this qtr and feel things with the PA amendment, SD and EWC are going to be very good. Still collecting thoughts on Flex, and will put something together later, but I still believe they will be in. Very important for people to re-read both IOC’s December PR about the project and Flex’s from the other day; put them side-by-side. There’s some interesting wording in each that may give us more understanding of what’s going on. |
