Energy Stocks Powering Higher – LNG Cheniere Energy DNN Denison Mines Gathering Momentum

by Olivier on January 31, 2011

Sure enough the moment I lightened up a bit, most of my holdings run up like crazy. I couldn’t be happier about what happened today. Instead of wasting precious time and energy looking back regretfully, my job is to listen to what the market tries to tell me. My focus is on properly executing my next trades and finding new opportunities. Getting exposure to new opportunities could mean initiating new positions or redeploying available funds into existing positions. Today’s price action clearly demonstrates energy stocks are the place to be as they printed the highest gains for the day. Natural Gas and especially Uranium want higher.

Commodities in general are doing very well. Gold and silver are the notable exception. NEM – Newmont, Mining ABX – Barrick Gold and GG – Goldcorp all look extremely tired and are showing serious signs they are about to roll over. GLD – the Gold ETF and SLV – the Silver ETF look like they have topped out for the time being. The big caps in the precious metals don’t lead. The exact opposite of what is happening with CCJ CCO.TO – Cameco the Uranium mining bellwether stock. As I’ve stated numerous times in the past few months, Uranium is now the one sector I am most bullish on.

Let’s go back to redeploying funds accordingly. ‘Accordingly’ being the key word here. Today taught me some valuable lessons. It looks like the energy related stocks in my portfolio show much less correlation to the overall market trend than I originally thought. Today CNL.TO – Continental Gold and TMB.TO – Tembec didn’t even come close to my other portfolio positions’ performance. In fact CNL.TO was down and TMB.TO was barely able to move up. I like both, but my job is to be objective and to listen to the charts. The charts tell me to get ready to further reduce or sell both positions and redeploy the funds into my strongest positions, namely LNG – Cheniere Energy and DNN DML.TO – Denison Mines.

Feed your winners and kill your losers.

To make a long story short, my focus is shifting more and more towards Energy. A few sectors that I am closely monitoring right now are Healthcare, Fertilizer Stocks, Coal and Iron Ore.

A key ingredient to great performance is your willingness to keep an open mind for new opportunities. This of course is closely related to your ability to leave your comfort zone and embrace ambiguity and forget your opinions. That’s why I am once again going to close tonight’s post with the quote I used to round up my Cardinal Rules of Trading post:

Do the hard thing. – Richard Dennis

My public list with all my charts can be viewed here:

Buenas noches!

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