Sell Half PDO FPP Shares, Let The Rest Ride As Oil Set To Make New Highs...

We have taken half of our positions off PDO and FPP at $29.50 and $7 respectively and are letting the rest of our shares ride. While we believe both stocks are headed higher on fresh highs in crude Oil, we must be prudent in taking some profits off the table after a 58% run in PDO shares from our $18.60-$18.70 entry and a 38% run in FPP shares from our $5.02-$5.07 entry taken 2 weeks ago (see our June 5th blog post). With the July contract in crude expiring this friday we expect Oil to be highly attracted to the $140 level as hedge funds clearly continue to be net long Oil and have an interest in closing Oil strong into expiration. As such we continue to hold half our PDO and FPP positions as well as 100% of our ROYL position as we believe energy prices will continue to be elevated with pressure to the upside. Natural gas continues to be our favorite sector in the market right now as we believe the $15-17 level in spot prices is inevitable, and we therefore continue to be huge holders of ROYL as the company remains completely unhedged and continues to increase natural gas production.