March 31st, 2020

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Technical observations of RossClark@shaw.ca

-Crude Oil Oversold-
Covered Writing Opportunities Exist in Energy Stocks

The seventy dollar decline in Crude oil prices has now triggered daily alerts in our Capitulation model. Previous examples of capitulation were Sept ’06, Nov ’02, Dec ’97, Dec ’93, Dec ’91, Apr ‘90 and Dec ’87. The most consistent action following the alerts was an upside bias in the XOI and TSX Energy indices in the ensuing two to three months. We would look to buy on any weakness.

In today’s environment, with option premiums near all-time highs, covered writing strategies offer a means of capturing incremental income while owning an optionable stock. By purchasing an underlying stock and selling a call option an investor has the opportunity to participate in some of the upside action in the stock while taking in premium from the sale of the call option and gaining downside protection equal to the premium received.

                                                             2006                                                                                                                              2002

                                                             1998                                                                                                                              1993

                                                             1991                                                                                                                              1990


The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

October 22nd, 2008
EMAIL:: bobhoye@institutionaladvisors.com
CHARTWORKS WEBSITE:: www.institutionaladvisors.com

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March 31st, 2020

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