(I really don't think it is a massive buying opportunity but when someone feels so bullish, I like it to take him on record. I have never in my life seen "absolute buying opportunity".)
Oil isn't falling by itself – it's taking the whole energy sector with it.
In fact, energy is the only S&P 500 sector down on the year. It has lost 8.5 percent year-to-date and is off19 percent from its 52-week highs. This happened as the price of a barrel of U.S. crude oil dropped from $107 to $67 in under six months.
Yet some on Wall Street aren't down on the sector's prospects.
"I'm a massive buyer here," said David Seaburg, head of sales trading at Cowen and Company. "At these levels, I think it's an absolute buying opportunity."
Seaburg sees two factors that make the energy sector promising. First is that he expects oil supplies to eventually respond, leading to a stability in prices at the very least. Second, Seaburg said exploration and production (E&P) companies are reducing their capital expenditures.
"We're in a spot right now that's essentially a sweet spot," he said. "A lot of these dedicated energy hedge funds get a tap on the shoulder by their risk departments saying 'Get out of these trades'. They exited pretty aggressively and others followed suit. I think it's well overdone here and I think it should be bought aggressively here."
"This isn't a five-year trade," Seaburg said. "You're going to look back in six months and say 'I wish I got involved here'. The real money is made when the pain is at its most. We're at that point right now. So I'm looking for higher levels."
Full article at: http://finance.yahoo.com/blogs/talking-numbers/this-sector-is-a--massive-buying-opportunity-232432985.html
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