On Monday, I pointed out an a href="http://briskycapital.blogspot.com/2008/12/oil-ready-for-short-term-rally.html"opportunity for a short-term oil trade/a. Its working out pretty well so far, as crude oil has moved higher all week from around $40 to current levels of $47. br /br /The main reason for the trade, which is OPEC's likely production cut next week, has been noticed by many traders. In fact, the strength in these stocks suggest that it might be worth selling the hype on this trade. I'm thinking this mainly because there are very few compelling reasons to buy stocks or sectors right now, and lots of people are looking at this trade. I do believe OPEC will make a major cut in order to increase oil prices, but if it doesn't exceed expectations, which are now heightening, these stocks could sell off again. Its a situation to monitor closely. If you're ...

Crude looks like it is entering its own type of recession this year, with the International Energy Agency predicting a fall in oil consumption for the first time in 25 years. But David Newman still thinks there are huge profits to be had in the oil industry. He recommends an Oil & Gas ETF (NYSE:IEO) and Oil Services ETF (NYSE:OIH), using a ‘protective put strategy’ to cover against downside risk.

This from The Sovereign Society:

The oil industry is a tricky business.

I know. I was a well-site geologist for many years. Just like the stock market, sometimes the best-looking prospects are your worst duds and those you were not too sure about gush profits.

It’s a gamble, but one that can pay off big if you’re right. But

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Oil prices, and oil stocks, are ready for a short-term rally here. OPEC is scrambling to deal with the major slowdown in global demand. a href="http://online.wsj.com/article/SB122858288078585557.html"Most likely they will decrease production output to help prices recover/a. Remember in July when President Bush went to Saudi Arabia begging for production increases? What a difference a couple of months can make. br /br /The pattern I see here is: br /br /A) Right now-oil stocks oversold with oil prices around $40.br /B) OPEC cuts production. Oil moves to somewhere between $50-75/barrel. Oil stocks rally.br /C) Rally wears off, sometime early 2009. Stocks fall again as recession-caused demand destruction continues. Oil stocks back to current levels.br /br /By the way, this is also the pattern for financial stocks, and homebuilders, and automakers. We're seeing a potentially trade-able pattern, but a pattern of lower highs and ...

Don’t expect oil prices to remain at these low levels for long, says Byron King. Demand weakness for crude is temporary. And oil-producing nations cannot sustain their own economies unless oil prices are close to $100 a barrel. Byron says it could be time for investors to slowly build up a position in oil service stocks.

This from Whiskey & Gunpowder:

Along with the market decline, the price of oil has fallen. It’s down 50% within three months. Back when oil hit $147 per barrel in July, I said that the price “ought” to be in the range of $100-110, with the possibility of a drop into the $90s. That’s what the fundamentals told me back then.

Most of the decline in oil price from $147 down to about $100 was directly related to the strengthening of the dollar. So the oil price slide in July, August and

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When people ask me if I think crude oil is going to $50 or $150, I nod sagely and say: “Yes, probably.” I’m not being flip. I’m simply giving both the short-term and the long-term timeframes. Short-term, crude oil is probably heading lower, even though it’s nearly 60% off its highs. The last chance to hold the line on oil prices was at OPEC’s emergency meeting. And the oil cartel choked like a cat on a hairball. They cut 1.5 million barrels per day of production when they needed to cut about 3 million barrels per day. The OPEC meeting was the last obstacle in the way of deflationary forces that are driving oil prices lower in the short-term. Long-term, there are forces that should drive oil much higher. And one of ...

Since the belatedly radical action taken by the UK and Eurozone governments just over a week ago to directly recapitalize their key banks and guarantee interbank lending, a strategy now replicated from the US to South Korea, measures of credit market stress have slowly improved. In fact, this 'normalisation' is now accelerating. The TED spread is down to just over 3% today, from 3.59% Friday; the two-year swap spread down to 111 from 122 (and having peaked at over 160), LIBOR is down to 4% and the yield on 3 mth Treasuries is up to near 1% (from zero in the depths of despair we reached a couple of weeks back). I'm playing this trend by being short the VIX. All these numbers, while still clearly abnormal, speak of a very gradual recovery from the extreme risk aversion that has paralysed credit markets in recent weeks. ...

Zacks #3 stock Schlumberger (SLB) is in oversold territory today and has a stochastic value of 5.30. Shares of the leading oilfield services company are down 4.06% since the opening bell.Georgia Gulf (GGC) remains oversold with a stochastic measurement of 2.706. However, the Zacks #2 stock has rebounded 3.15% since the morning and is trading at $2.36. "SLB" Free Stock Analysis: Buy? Sell? Hold?"GGC" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

October 16, picks

CNBC Fast Money traders picks..track them at:

http://trackthepros.com/stocks/category/228

Adami:

GOOG - Google - Buy Gasoline - Buy IBM - IBM - Buy UTX - United Technologies - Buy NVS - Novartis - Buy - Final Trade

Finerman: OIH - Oil Service HLDRS - Buy - Final Trade part 1 USO - United States Oil Fund - Short - Final Trade part 2 NU - Nucor - Buy FCX - Freeport McMoRan - Buy DEO - Diageo - Buy MO - Altria - Buy BUD - Budweiser - Buy, “one of the biggest deals of all time”

Najarian: SCHW - Charles Schwab - Buy ABT - Abbott Labs - Buy C - Citigroup - Buy at $15 and sell an option SLB - Schlumberger - Keep an eye on it, it’s been beaten CHK - Chesapeake - Buy - Final Trade

Terranova: GIS - General Mills - Buy EOG - EOG Resources

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Monday:Economic: NAEarnings: Fastenal (FAST), XL Cap (XL)Tuesday:Economic: NAEarnings: J&J (JNJ), Pepsi (PEP), Supervalu (SVU), WW Grainger (GWW), Altera (ALTR), CSX (CSX), Genentech (DNA), Intel (INTC), USANA (USNA)Wednesday:Economic: Weekly Crude,Earnings: BlackRock (BLK), C Schwab (SCHW), Coke (KO), Delta (DAL), JP Morgan (JPM), St Jude (STJ), Wells Fargo (WFC), Badger (BMI), eBay (EBAY), Novellus (NVLS), Landstar (LSTR), Steel Dynamics (STLD), Xilinx (XLNX)Thursday:Economic: Weekly Claims, Wholesale Invs (0.4%)Earnings: Bank of NY (BK), BB&T (BBT), Citigroup (C), CIT Group (CIT), Continental (CAL), Cypress (CY), Harley (HOG), Hershey (HSY), Illinois Tool (ITW), Merrill (MER), Nokia (NOK), Nucor (NUE), Parker Hannifin (PH), Sherwin W (SHW), Sonoco (SON), Southwest (LUV), Sunpower (SPWRA), United Tech (UTX), Cap One (COF), Gilead (GILD), Google (GOOG), IBM (IBM), Intuitive Surgical (ISRG), Zions Banc (ZION)Friday:Economic:Earnings: Amcol (ACO), Comerica (CMA), Genuine Parts (GPC), Honeywell (HON), ...

BP Capital ManagementBP Capital Management | Boon Pickens HoldingsThis post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.With all the commotion surrounding energy these days, it never hurts to track an energy focused hedge fund ran by none other than Boone Pickens. If you are unfamiliar with Pickens, he is an energy maverick and his fund returned 300% in 2005. He is a big advocate of Peak Oil Theory and runs an energy-centric hedge fund based in Dallas, Texas. Although he typically holds numerous positions in oil, he is also big on alternative energy (except ethanol) and has numerous holdings there as well. He most recently advocated a large natural gas position and has additionally made a big bet on ...