That’s a harsh call, the reason it's tanking is due to the DOW Down and OIL being down. It doesn't have a thing to do with a broker recommendation but more sentiment surrounding the market and energy stocks. Energy is a long term buy and solid investment but you need to look at what is happening right now. The market is driven by fear and greed. We are in fear mode currently.
I posted this on another thread but supply and demand dynamics in the short term will be an issue that energy stocks will have to deal with. I have gone from being very bullish on energy to being more conservative in the short term. From a macro perspective a few factors have contributed to my change in thought.
1. For the first time in 4 decades foreign oil companies are being allowed into since nationalization of the industry by Saddam in 1972. It essentially means Iraq will go from producing approximately 2.5m bopd to an increase 4 fold due to access to new technology and foreign expertise.
2. With ongoing unrest in Iran, if the moderates get into power (yet to be seen) then the same process will occur and oil will flood the supply side. If demand continues to drop, with increased supply, the short term outlook is not rosy.
3. China is stockpiling oil and continuing to acquire stockpiling facilities to stockpile more. This stockpiling is/was propping up the oil price. China wants to strategically use their oil to effect the market price for oil just as OPEC does when it turns on and off the tap.
Just a few thoughts and not some unsubstantiated ramblings.....
NDO Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
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