Nat Gas update: Short-term tipping point?

What goes up must come down unless it's March of 2009 or pre-Internet bubble bursting time. Bull runs can outlast even the most extravagant projections of uber-bulls and squash the testicles of the biggest bears. But last year's run was powered by the Fed stimulus program, among other free-now-but-punishing-to-all-later maneuvers.

For now, it's time to look at my Nat Gas 40. It's fun to see their gains, even if I have not a single position in any. Besides, things are just frothy enough here in the 12 days since Obama's clean energy speech (and his anti-BP chatter today) to possibly mark a short-term top in one of the hottest sectors.

These 40 natty gassers include today's closing price and the gain since Obama's speech 12 days ago, and the candlestick chart analysis. Interesting that the only two that got "Sell Confirmed" status today are among my least favorite issues. 

My Favorite 5:
CLNE 18.17 (+22.39%) — "Buy If" (American Bulls)
HGT 21.59 (+11.29%) — "Sell If" (American Bulls)
PSE 25.15 (+4.44%) — "Sell If" (American Bulls)
SWN 44.99 (+13.04%) — "Sell If" (American Bulls)
WPRT 19.42 (+32.2%) — "Hold" (American Bulls)

Natty Gassers I like, though they lack strong balance sheets:
BEXP 18.96 (+9.23%) — "Hold" (American Bulls)
CHK 25.36 (+11.28%) — "Sell If" (American Bulls)
DIG (etf) 31.13 (+13.49%) — "Hold" (American Bulls)
FCG (etf) 18.05 (+10.80%) — "Hold" (American Bulls)
FST 32.19 (+18.26%) — "Hold" (American Bulls)
HK 21.67 (+16.63%) — "Hold" (American Bulls)
KOG 3.62 (+13.48%) — "Hold" (American Bulls)
KWK 13.81 (+23.3%) — "Hold" (American Bulls)
MMR 11.99 (+16.52%) — "Hold" (American Bulls)
NBL 66.45 (+12.51%) — "Hold" (American Bulls)
NFX 57.05 (+14.21%) — "Hold" (American Bulls)
NGS 17.25 (+12.09%) — "Hold" (American Bulls)
PETD 26.60 (+27.7%) — "Sell If" (American Bulls)
PQ 7.96 (+27.97%) — "Hold" (American Bulls)
PVA 24.78 (+13.36%) — "Sell If" (American Bulls)
PXJ 15.93 (+11.01%) — "Hold" (American Bulls)
REXX 11.97 (+15.88%) — "Hold" (American Bulls)
ROSE 26.21 (+19.9%) — "Hold" (American Bulls)
STR 49.88 (+13.16%) — "Sell If" (American Bulls)
TLM 17.78 (+5.52%) — "Buy If" (American Bulls)
UNG (etf) 8.83 (+17.89%) — "Hold" (American Bulls)
UPL 50.04 (+1.73%) — "Buy If" (American Bulls)
XOP 44.15 (+8%) — "Hold" (American Bulls)

Several of these natty gassers are hot, but fundamentally are mediocre:
BRNC 4.00 (+14.94%) — "Hold" (American Bulls)
COG 38.41 (+11.24%) — "Sell If" (American Bulls)
CRK 33.53 (+15.34%) — "Sell If" (American Bulls)
CRZO 20.24 (16.66%) — "Hold" (American Bulls)
DPTR 1.16 (+2.65%) — "Sell Confirmed" (American Bulls)
FTK 1.44 (+8.27%) — "Sell If" (American Bulls)
GDP 15.29 (27.1%) — "Hold" (American Bulls)
HERO 3.19 (+23.17%) — "Buy Confirmed" (American Bulls)
IEO 55.20 (+9.13%) — "Sell If" (American Bulls)
RRC 50.83 (+8.63%) — "Hold" (American Bulls)
VNR 22.46 (+5.74) — "Sell If" (American Bulls)
XCO 18.88 (+8.07%) — "Hold" (American Bulls)
XTO 44.23 (+4.44%) — "Wait" (American Bulls)

Of the Nat Gas 40, only one was a "Buy Confirmed" today. Just three are on "Buy If" status.

On a neutral front, 22 are on "Hold" and only one is a "Wait".

12 are "Sell If" status and one was "Sell Confirmed" today.

Today may have been the tipping point for the sector in the near term. For short-term traders, it's time to start scaling out a bit. For long-term nat gas believers, no need to get out yet barring a broad market puke party. There's a nice climb ahead as long as A) Obama continues preaching to the choir of energy worriers and B) we have live video of Mother Earth's blood spewing out of the Gulf.

Open high, close low?

Is it the same, recyclable pattern for the broader market? When I went to sleep at about 4 am Hawaii time, AAPL was above 258, up more than 3 bucks already. Now, with 45 minutes left in the session, AAPL is back down to 255-256.

The Nat Gas sector continues to blossom as BP (30.79 -9.36%) continues to bottom. Technically, BP was due for the bounce off 29 last week. But the nat gas industry had lagged for months, years. Of the 40 on my list, 32 are in the green today, even with the overall pullback. Interesting to note, however, that some of the decliners today include GDP and HGT, which were among the leaders on Friday. GDP has fluky fundamentals and I just don't like it compared to the elite issues in the sector. A tiny float made it great daytrader material.

HGT, on the other hand, has a great balance sheet. This may be my chance to finally re-enter the sector, but the market may be at its turning point soon. WPRT is a big gainer at +6.57% (19.23), along with MMR (again) at +6.27% to 11.69 and UNG +4.9% to 8.57. BRNC, PETD, ROSE are also up more than 3%.

And, AAPL has just hit 257. That was quick. Oh,  the things that happen on low volume.

Paring natty gassers down

Sure, following 40 nat gas plays is never dull, but the time has come to filter out the crap.

Here's what I like most:

CLNE — not on fundamentals or technicals, but it is pure clean energy speculation
HGT
PSE
SWN
WPRT — pure clean energy play

Here's what is solid, just not sexy:
BEXP
CHK
DIG (etf)
FCG (etf)
FST
HK
KOG — debt free
KWK
MMR
NBL
NFX
NGS
PETD
PVA
PQ
PXJ
REXX
ROSE
STR
TLM
UNG (etf)
UPL
XOP

Here's what I don't like:
BRNC
COG
CRK
CRZO
DPTR
FTK
GDP
HERO
IEO
RRC
VNR
XCO

XTO

Nat Gas update: HGT

Hugton Royalty Trust

Thursday, June 3, 2 pm Eastern: 19.40

Thursday, June 10, close: 21.00

Gain: +8.25%

Candlestick analysis: "Hold" on buy at 19.60 on June 9 (American Bulls)

Summary: Third straight day up. I looked at this yesterday after Adami pumped it on Fast Money. Huge margins, returns and growth. Looked like an internet stock from the late 1990s except that this trust has cash ($5.65 million) and zero debt. I like that last part. I'm starting to like HGT a lot more than UNG. Caution advised: HGT hasn't been here at 21 since November '08. 

HGT 6-month chart (daily)

HGT 4-year (lifetime) chart (weekly)

Nat Gas explosion

After crawling over the finish line yesterday mostly beaten down, all 40 of the natty gassers on my list are in positive territory. Insane!

UNG is up 1.50%, which is near the bottom of these big gainers. DIG (+7.5%, 28.85), PETD (+6.9%, 23.47) and GDP (+6.8%, 14.38) lead the pack. WPRT is up 5.9% after pulling back recently. The entire sector took a breather for a couple of days, but is now leading the market.

Adami's touted pick, HGT, is up 5.0% to 21.03. Natty gassers on fire!

Natty gassers: HGT

Guy Adami quite bullish on HGT today, a natural gas stock I'd never heard of, so I'm taking a look.

Hugton Royalty Trust (HGT)

Key Statistics

Profit margin: 97.83%

Operating margin: 97.83%

Return on Assets: 17.47%

Return on Equity: 28.70%

Revenue: 41.30M

Quarterly Revenue Growth (yoy): 192.50%

Quarterly Earnings Growth (yoy): 203.10%

Total Cash: 5.65M

Total Debt: 0.00

Shares Outstanding: 40.00M

Float: 38.82M

% held by Insiders: 0.59%

% held by Institutions: 21.80%

CFO, XTO Energy Inc.: Louis Baldwin n/a

Candlestick analysis: "Buy Confirmed" today at 19.60 (American Bulls)

Summary: As a trust, HGT trades a bit differently, but these numbers are astounding, even more so with the tiny float. But I'm still curious. 

Business summary:

Hugoton Royalty Trust operates as an express trust in the United States. It holds a 80% net profits interests in certain natural gas producing working interest properties of XTO Energy Inc. XTO Energy Inc. engages in the production and sale of oil and gas, and holds working interests in the Hugoton area, which covers Texas, Oklahoma, and Kansas; the Anadarko Basin of western Oklahoma; and the Green River Basin located in southwestern Wyoming. Hugoton Royalty Trust was founded in 1998 and is based in Dallas, Texas. 

Hard to argue with the numbers and the chart appears to be bullish. I'm adding HGT to my list and now have 40 natty gassers on it.

HGT 3-month chart (daily)