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Linn Energy, LLC Message Board

  • ronharv ronharv Jun 17, 2014 4:45 PM Flag

    Today's Trading

    I think itoday's trading was surprisingly good in light of the strong move up over the past few weeks. Several down days or even stasis for a while seems a tad overdue. But, then again, momentum, positive press, an extra-high income, and a generally oversold condition is (so far) overcoming a consolidation that I'd normally expect. Moreover, I believe that buying by disappointed shorts is still lurking in the wings, as these folks can have remarkable staying power. But when LINE starts bumping into 34 or so, their exit doors could get a little crowded. The market, after all, is an emotional arena so that exaggerations in PPS, not just on the low end but in the upper reaches, are not unusual.

    Anyway, if Linn could actually cut a smartly accretive deal for the acreage now up for sale (and stick to Rockov's assertion that there'll be no dist. increase prior to a sustainable DCF of 1.1x), those bargain (as I view it) 2016 options should bring broad grins to those who buy/bought them.

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    • Line stalled out right at gap resistance from 3/27. RSI reading of 83 is signaling short term overbought.

      • 1 Reply to lordofdoggtown
      • Which means, I gather, you expect this to stall too. I tend to agree, but the market proved me wrong on my last prediction, I thought we'd mess around $30 for the rest of the month.

        If we can hold and continue to gradually melt-up, news (not charts) becomes key. Unfortunately, going by management's guidance, Q2 coverage is likely to be worse than Q1, despite the weather issues fading. The guidance for the rest of 2014 was down a bit, and Wolfcamp I won't contribute enough yet. If they can surprise with an over 1.0 number, that would be huge, even though in practical terms, a few tenths of a percent shouldn't matter.

        Then of course there's Wolfcamp II, that could come in any time. Again, they need to impress, analysts and article writers (and me) are expecting a bigger cash flow punch from this round. If both those things are positive, even without an immediate increase I think we can make $34-35 by the year end. If both disappoint, we could be singing the $28 blues again, I don't think anything's healed yet.

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