Wednesday, July 13, 2011

Working on the Lead Time Thingy: Clean Energy Fuels Catches an Upgrade; Frontier Rare Earths Pops (CLNE; FRO.tsx0

In yesterday morning's post "Merger Mania Returns to Natural Gas" I mentioned:
...Bucking the tape can be hazardous to your wealth but there are times when it is the right call. The jury's still out but sometime today we should hit a 38.2% retracement of the runup which might provide some opportunity on the long side....
The June 24- July 7 runup in the Dow had been 785.91 points.
Multiplying by the first of the major Fibonacci multiples (38.2%; 50%; 61.8%) the Fibonacci (38.2%) gives you 300.21 points. At the last hour low yesterday we had retraced 296.22. Thats close enough.

So you don't think it was an en passant fluke, here's the entirety of Monday's "Here it Comes: Your 19th Nervous Market Breakdown"
We're down 200 DJIA points since Friday's open and if you start throwing Fibo's on the 785 point run up, we're still 100 points above a 38.2 retrace. So it's time for a happy song:
Anywho [I believe the Chicago Manual of Style goes with 'anyhoo' -ed] that is enough of a heads-up for anyone paying attention. The problem was with the individual stocks we mentioned. CLNE was up 13% by the time we got around to posting and Frontier was 4.5%.

Today CLNE is up another 13.7% at $17.15 and FRO is up 16% at $2.31.
Too fast for anyone not at a terminal or a desk down the hall. We're working on it.

We had the Frontier news this morning, here's Clean Energy Fuels.
First up, Schaeffer's Research:
Just one day after rallying on news of a Chesapeake Energy (CHK) investment, CLNE is on the upswing again today. The stock has surged 11% in early trading, with traders cheering an upgrade to "buy" from "underperform" at B of A-Merrill Lynch. There's still plenty of room for more bulls on CLNE's bandwagon; Zacks reports just three "strong buy" recommendations from analysts, compared to seven "holds" and one "sell."
And a bit more detail from MarketBeat:
Clean Energy Fuels Corp. shares are set to rally for a second-straight day in the wake of late Monday’s announcement that Chesapeake Energy Corp. will make a $150 million investment in the company. Bank of America Merrill Lynch raises its stock-investment rating on Clean Energy to buy from underperform and boosts its price target “on increased confidence and higher estimates.” The company provides natural gas for vehicles, a still-nascent industry in which the company has yet to turn a profit, but the firm notes the increased cost of such vehicles to conventional ones continues to narrow, increasing demand for the nat-gas trucks in the process. Shares gained 7% to $16.13 premarket.