1. NS flirted with the low $47 handles for the fourth time in June. It has bounced up each time.
2. Volume during the last 1.25 hours of today reached approx. 125,000 shares. This is what helped the stock move from $47.68 to $48.09 in spite of persisting weakness in the rest of the pipeline plays.
3. In spite of awful market conditions, evidence of oil demand destruction, and steep increase in treasury yields during the last two weeks, NS has refused to drop below $47.
While my average cost per unit is $49, and I see no scope for further averaging down unless we hit $45, this may be an excellent entry point for those that believe that:
- Demand destruction will be minimal and won't affect NS volumes much (more than 10%). - Treasury yields are not going to 5% anytime soon.