Next week is the last week of tax selling. Friday is also the expiration of December options which tends to amplify price movements. This is the time to load up - I love the January $4 calls. On Monday Dec 23rd HK will close over $4.00. This is my prediction and I'm putting my money on it.
The price of oil and gas commodity stocks has nothing to do with the actual paper price of oil and NG. There is a world wide glut of these commodities which dictates the price. Why are most hedges from these companies always so much below the "paper" price that you see on TV everyday. HK's hedges are closer to $90 for oil. Hk needs less debt and substantially higher production levels before the price will ever move back to the $5 area.
Tax loss selling continues into the last week in December. I'm not buying any HK until January at the earliest. I want to see some sales of non-core assets to fund drilling in core areas, and then stronger action in the Oil E&P sector, along with somewhat more bullish coverage of this sector in the financial media. Then when HK also starts a confirmed uptrend I'll open an initial long position. There's plenty of upside in HK even if you end up buying in the $4.30-4.70 range.
There's been some oversimplified analysis published in financial media about an oil glut and predictions of much lower oil prices in the years ahead. They didn't put enough weight on bullish factors: 1) Saudis will cut production to keep Brent oil prices around $100. North American production then just replaces Saudi production. 2) Some refineries can be expanded to produce more oil products (gasoline, diesel, jet fuel), which can be exported out of the U.S. This will soak up some excess production in the future. Remember Say's law: Supply creates its own demand. That means valuable light crude will go somewhere to be refined into oil products. 3) Demand for oil products isn't completely inelastic and when prices drop, demand increases in many diverse ways, such as more vacation travel with longer driving trips and longer airline trips. All of these factors will limit the decline in oil prices in the years ahead. US Oil prices could be right about where they are today in three years.
I agree with almost everything you state, Although I would like to see them pay down some debt with some of their non-core sale assets. You seem to like everything you see except the short term price action and maybe also like to see HK sell some non core. Why not nibble a little cheese here in da high 3's and then follow your plan of adding on the way up. Just a question.