With Crude Falling, The Time to Buy Oil Stocks Is Now

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Wall Street Gurus Agree – Oracle and Cabot Oil are Buys

There's no way around it — the E&P industry in North America is turning out tons and tons of oil.

By fracking regions like the Bakken and Eagle Ford, the oil and gas industry is setting America on a course to energy independence.

Analysts at the Energy Information Administration (EIA) now expect the U.S. to produce an average of 7.5 million barrels a day of oil this year. That number will rise to roughly 8.4 million barrels a day in 2014.

This is certainly great news. Except for one slight problem: It's creating a huge supply glut.

As we've fracked along, inventories have continued to rise. That's a big issue, because American's current demand isn't coming close to using those big inventories. While we still import some oil — mostly from Canada and Mexico — supplies across the U.S. continue to rise. That's managed to push prices from NYMEX traded Texas Tea down below $100 per barrel for the first time in months.

However, they won't stay that way as many long-term catalysts are ready to send prices higher in the future. For investors, the time to buy oil stocks could be on.

WTI at Four Month Lows

West Texas Intermediate (WTI) has fallen had over the last few weeks as demand simply hasn’t kept up with rising inventories. As E&P firms continue to tap our shale resources at a rapid pace, supplies of crude oil in America have risen to record highs.

After being delayed due to the government shutdown, the EIA report for the week ending Oct. 18 showed crude oil supplies expanded by more than 5.2 million barrels. That was more than expected by analysts and pushed inventories to 379.8 million barrels — the highest amount since July and above five-year averages.

What's more important is that those supplies have risen 6.8% — or 24.2 million barrels — in the last five weeks alone.

Given the bearish picture facing WTI, is understandable that prices for American crude oil benchmark would take a hit, all the way past the psychological $100 per a barrel mark. December futures for WTI can currently be had for only $96.40 per barrel. That's the lowest settlement price on the NYMEX for WTI since June.

Overall, WTI futures have slipped about 6% since mid-October.

Better News For Crude Longer Term

While there are plenty of reasons to be sour on WTI crude at the moment, the longer-term picture is still quite rosy for oil producers and oil stocks.

First, drilling costs continue to rise … by a lot. Using of all this high-tech gear in order to frack a well or drill deep offshore is getting downright expensive. According to think tank McKinsey, the inflation-adjusted average cost of starting a new oil well has more than doubled over the past decade. Meanwhile, the most advanced deepwater drilling rigs can cost about $600,000 a day to rent.

These higher and higher costs need to be covered by producers in order to justify drilling in the first place. Oil prices need to be high and if they're not “cutting the mustard,” E&P firms will stop drilling and cut supplies. Think about natural gas just a few months ago. The same scenario will play out in the oil markets.

Secondly, new sources of demand may be at hand. But they aren't coming from here in the U.S.

Currently, it's illegal for producers in the U.S. to export their bounty to nations without free-trade agreements. However, given the huge plethora of supplies and the desire to keep jobs growing, exports could be a thing of the future. Already, several CEO's of energy companies shave begun drumming up support for the idea and analysts estimate that the U.S. will begin exporting crude within a few years.

That will once again make WTI an international benchmark and with that prestige comes more global demand and higher prices.

The Time To Buy Oil Stocks Is Now

With WTI falling, investors are being given an early Christmas present — an opportunity to buy energy stocks. As crude has fallen, so have share prices for several producers like EOG Resources (EOG) and Cabot Oil & Gas (COG) … although both oil stocks have regained a sliver of those losses so far today.

Given the longer-term picture, the markets are giving portfolios are great chance to re-up exposure to oil stocks. Of course, an exchange-traded fund remains the easiest way to buy oil stocks.

Fellow InvestorPlace contributor Lawrence Meyers recently recommended the Energy SPDR (XLE) as good ETF to hold for life. I like the pick and you could certainly do worse, but my personal favorite way to play WTI crude would be the iShares U.S. Energy ETF (IYE).

The ETF tracks 82 domestic energy firms across all sub-sectors of the industry. This provides exposure to the E&P players, refiners, midstream and oil service stocks. There are even a few alternative energy names — such as First Solar (FSLR) — as well. The fund also provides exposure to faster growing small- and mid-cap players. That gives investors an opportunity to play the current low price situation (the refiners will have juicer margins) to the high (the producers will be better).

That diverse focus has allowed the fund to rack up some impressive annual returns of 14.18% over the last 10 years. Fees run a cheap 0.45%, or $45 per $10,000 invested.

All in all, the current low price market for WTI crude won't stay this way forever. That means investors should run, not walk, into energy and oil stocks. The iShares U.S. Energy ETF is the best domestic way to do that.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Top 10 Offbeat, Cheap Cities for Retirement

Not everyone wants to retire and move to Florida. Sure, the warm weather, low taxes and laid-back lifestyle are attractive, but some yearn for something different; a new adventure as they embark on the next stage of life. They might not even mind watching the seasons change.

That got ThinkAdvisor to put together this list. We looked for places with a low cost of living and relatively affordable housing that still offer, or are close to, many of the cultural amenities often found in bigger cities. Beautiful scenery, places to hike and indulge in other outdoor activities are also close at hand to the cities on our list.

We also considered the idea that many people might want to stay closer to their hometown when they retire, the better to keep in touch with grandkids, other family and friends.

(Check out Top 10 Best Foreign Countries for Retirement: 2013 on ThinkAdvisor.)

For the cost of living index we used data from areavibes.com. For median home prices, we used data from the National Association of Realtors, except where noted.

Check out our list of Top 10 Offbeat, Cheap Cities for Retirement ranked by cost of living:

10. Wenatchee, Wash.

Cost of Living Index: 97

Median Home Price: $216,900  (down 11% year over year, data from zillow.com.)

State Sales Tax: 6.5%

Life among the apple blossoms and near the Columbia River offers many opportunities for those who love the outdoors. Known as the Apple Capital of the World, the city of about 31,000 has a metro population of 110,000. And when you need a city fix, Seattle is less than three hours away. In 2011, AARP Magazine named it the best place to retire.

9. Montgomery, Ala.

Cost of Living Index: 97

Median Home Price: $138,500 (up 4.5%)

State Sales Tax: 4%

Montgomery’s mild winters might be just the place for you. There’s plenty to do in the capital city, which boasts an art museum with a broad collection that includes Southern and European works. There’s also an annual Shakespeare festival, a minor league baseball team and the Civil Rights Memorial, among other attractions.

8. Cheyenne, Wyo.

Cost of Living Index: 96

Median Home Price: $166,954 (up 17.3%)

State Sales Tax: 4%

Warm summers make “Trail Town USA” a great spot if you enjoy the outdoors. The city, with a metro population of about 91,000, is home to the Greater Cheyenne Greenway, a system of paths and trails that link the city’s parks and neighborhoods. Although winters are cold, as you might expect, they are relatively dry. The last week in July is time for the annual Cheyenne Frontier Days, which includes parades, a carnival and traditional roping events. The retirement planning website, TopRetirements.com, listed it among the top 100 most popular places to retire.

7. Sioux Falls, S.D.

Cost of Living Index: 96

Median Home Price: $158,300 (up 5%)

State Sales Tax: 4%

The fastest growing city in the state saw its population jump 22% to 158,000 between 2000 and 2010. Falls Park, with its spectacular falls on the Big Sioux River, is one of 70 parks in the city. A revived arts scene that includes an annual sculpture event, a band competition and other attractions offer diversions.

6. Greenville, S.C.

Cost of Living Index: 93

Median Home Price: $159,600 (up 4.9%)

State Sales Tax: 6%

Greenville sits nestled in the foothills of the Appalachians. Mild winters and plenty of outdoor activities abound. Myrtle Beach and Hilton Head are an easy drive to the east; to the north is Asheville, a hipster retreat in North Carolina; and to the west is Atlanta and all of its big city amenities. AARP included on its 2013 list of five affordable places to retire.

5. South Bend, Ind.

Cost of Living Index: 93

Median Home Price: $103,400 (up 21.8%)

State Sales Tax: 7%

South Bend’s is most known as the home of Notre Dame. On football Saturdays in the fall, the city of a little more than 100,00 comes alive. But don’t think that the Fighting Irish are the only game in town. There’s an arts museum, a performing arts center and the world’s largest chamber music competition, sponsored by the Fischoff National Chamber Music Association. Lake Michigan is just 20 miles away and the City of Big Shoulders, Chicago, is about an hour and a half away.

4. Columbia, Mo.

Cost of Living Index: 91

Median Home Price: $155,600  (down 2.5%)

State Sales Tax: 4.225%

Home to the first public university west of the Mississippi, Columbia is a college town through and through. There’s SEC football and basketball played on the University of Missouri campus, a fine theater program at Stephens College and plenty of places to indulge a range of outdoor activities. And if you need to hit a big city, Kansas City and St. Louis are each just a two-hour drive across Interstate 70.

3. Tulsa, Okla.

Cost of Living Index: 90

Median Home Price: $146,900 (up 7.6%)

State Sales Tax: 4.5%

Tulsa is bigger than the other cities on our list with a population of nearly 400,000. Still, we chose it for being off the beaten path for retirees and for its low cost of living. It boasts a fine art museum considered one of the 50 best in the U.S., a Museum of Jewish Art, the state Jazz Hall of Fame and holds the archives of Woody Guthrie in a center named for the folk singer. A strong public arts program and more than 6,000 acres of parks add to the beauty of the city.

2. Knoxville, Tenn.

Cost of Living Index: 89

Median Home Price: $152,600 (up 5.7%)

State Sales Tax: 7%

Another college town, Knoxville is home to the University of Tennessee. The city has 178,000 people and is a gateway to Great Smoky Mountains National Park. A symphony, a rich bluegrass tradition and opera company are part of the city’s cultural scene. And Blender named it one of the nation’s “20 Most Rock ’n’ Roll Towns” in 2003. Arts festivals and the largest Labor Day fireworks display in the country are on Knoxville’s regular menu of offerings.

1. Omaha, Neb.

Cost of Living Index: 88

Median Home Price: $151,300 (up 5.8%)

State Sales Tax: 5.5%

If it’s good enough for Warren Buffett, who are we to argue. A low cost of living is just one of things attractive about the place the “Oracle of Omaha” calls home (and he still lives in the home he paid $31,500 for in 1958). Beautiful scenery along the bluffs of the Missouri River make Omaha stand out. The largest community theater in the country, a symphony and an opera are just some of the cultural amenities of the city. A Black Music Hall of Fame, a zoo and a historic district downtown add to the charm.

-- Check out these stories on ThinkAdvisor:

Market Wrap-Up for Nov. 25 – Thou Shalt Always Reinvest Dividends

For many investors, dividends serve an important purpose as a source of stable income, especially for those individuals near or in retirement. But for all other investors, dividends can and should be a tremendous tool to compound wealth over a long timeframe. Whether you are in your 20s, 30s, 40s or 50s, investors need to remember to utilize a dividend investing strategy, even if it is often plagued with a “boring” stigma. It won’t be so boring when you’re financially well off in your 60s, 70s, and beyond.

In The Ten Commandments of Dividend Investing, the number two commandment states “Thou Shalt Always Reinvest Dividends.” As the post points out, when investors reinvest their dividends, letting their money work for them, it results in compounding returns that exponentially increase over a long timeframe. In contrast, focusing on growth stocks with seemingly substantial capital gains will limit the amount of wealth that is built up, making it that much harder for investors to adequately save for retirement.

For example, the Dow Jones Industrial Average has returned 59.39% over 10 years. At face value, that seems quite reasonable, but when accounting for reinvested dividends, the Dow Jones Industrial Average returns 105.45% over 10 years – almost doubling the gains. As the timeframe expands, the difference between capital gains and total return (capital gains plus reinvested dividends) becomes even more drastic, proving that reinvesting your dividends remains the best way to build wealth over the long-run. Read more about how reinvested and compounding dividends can work for you.

DRIPs

Ideally, dividend-focused investors should enroll in a Dividend Reinvestment Plan to make the dividend reinvestment process that much easier. Whether it is directly through the corporation issuing your stock or a broker sponsored DRIP, these reinvestment plans will allow an almost seamless process for reinvesting dividends, without the extra broker commission fees. For more, see Everything Investors Need to Know About DRIPs.

The Bottom Line

As I said from the start, reinvesting dividends is not a strategy for everyone. If you are an investor that relies on your dividend payouts as income, then by all means stick to your plan. But for all others that are investing in the stock market as a way to ensure financial prosperity in your golden years, reinvesting your dividends will make that goal much easier. Hopefully, you will have executed your plan successfully so that by the time you reach retirement you will have built enough wealth that you can switch your dividend strategy and live off the sizable dividend payouts as your main source of income.

Today in the Markets

Despite rising early, the major indices saw some choppy trading action before a late-day decline, ultimately finishing about flat.

Dividend stocks posting solid gains today included Footlocker (FL), RR Donnelly (RRD

5 Best Oil Stocks To Invest In Right Now

MARLBORO, N.J. -- It can be a fine line between business and bias.

The latest example of that fragile boundary is occurring here, where one of the town's newest merchants, Hobby Lobby, found itself embroiled in a public clash over religious expression and its place in commerce.

The Oklahoma City-based behemoth of bric-a-brac carries just about everything, from burlap lamp shades to mustache stamp sets, but Marlboro residents learned late last week that the retailer, founded by devout Christian David Green, does not sell anything related to the Jewish faith.

In Marlboro, where roughly a quarter of the population is Jewish, this omission of merchandise amounts to some as religious bias.

But is it?

Experts say businesses are well within their legal rights to choose what merchandise they do and do not want on their shelves. That doesn't mean it's good business, however.

5 Best Oil Stocks To Invest In Right Now: Imperial Oil Limited(IMO)

Imperial Oil Limited engages in the exploration, production, and sale of crude oil and natural gas in Canada. The company operates through three segments: Upstream, Downstream, and Chemical. The Upstream segment engages in the exploration and production of conventional crude oil, natural gas, synthetic oil, and bitumen primarily in the Western Provinces, the Canada Lands, and the Atlantic Offshore. Its primary conventional oil producing asset includes the Norman Wells oil field in the Northwest Territories. The Downstream segment engages in the transportation and refining of crude oil, as well as blending, distribution, and marketing of refined products. It owns and operates crude oil, and natural gas liquids and products pipelines in Alberta, Manitoba, and Ontario. The Chemical segment engages in the manufacture and marketing of various petrochemicals, including ethylene, benzene, aromatic and aliphatic solvents, plasticizer intermediates, and polyethylene resin. As of De cember 31, 2010, Imperial Oil Limited had 1,204 million oil-equivalent barrels of proved undeveloped reserves; maintained a nation-wide distribution system, including 24 primary terminals, to handle bulk and packaged petroleum products moving from refineries to market by pipeline, tanker, rail, and road transport; and sold petroleum products through 1,850 Esso retail service stations, of which approximately 510 were company owned or leased. The company was founded in 1880 and is headquartered in Calgary, Canada. Imperial Oil Limited operates as a subsidiary of Exxon Mobil Corporation.

Advisors' Opinion:

• [By Stephan Dube]

  Cold Lake's most notable producers:

  Husky Energy (HUSK.PK), see article here.Pengrowth Energy Corporation (PGH), see article here.Southern Pacific Resource (STPJF.PK), see article here.Canadian Natural Resources (CNQ), see article here.Devon Energy (DVN), see article here.Imperial Oil (IMO), see article here.Baytex, see article here.Bonavista Energy (BNPUF.PK), see article here.

  Athabasca's most notable producers:

• [By Vanin Aegea]

  Two companies that have been around for some time now are Imperial Oil (IMO) and Pembina Pipeline (PBA). Political instability in the Middle East has also given an extra relevance to the reserves found at this region, so let us see what the future holds and what gurus think of them.

• [By Arjun Sreekumar]

  Cost overruns and abandoned projects
  As a result of these factors, cost overruns have become quite common in Alberta. For instance, Imperial Oil (NYSEMKT: IMO  ) said it exceeded its cost estimates for the first phase of its Kearl bitumen mining facility by about C$2 billion.�And some companies have even decided to abandon expensive projects altogether.

5 Best Oil Stocks To Invest In Right Now: Total Nigeria PLC (TOTAL)

Total Nigeria PLC is a Nigeria-based company engaged in the marketing of petroleum and liquefied petroleum gas. The Company operates in three business lines, namely White Products (Retail and General Trade), Lubricants & Special Products, and Aviation fuels. The Company�� products portfolio includes fuels, lubricants, gas, insecticides, car-care products and bitumen. (Nigeria) PLC operates through a network of 500 retail outlets, five LPG bottling plants and three lubricant blending plants. Total (Nigeria) PLC�� major shareholder is Total SA.

10 Best Bank Stocks To Watch For 2014: Abraxas Petroleum Corp (AXAS)

Abraxas Petroleum Corporation is an independent energy company primarily engaged in the acquisition, exploitation, development and production of oil and gas in the United States and Canada. As of December 31, 2011, the Company�� estimated net proved reserves were 29.0 million barrels of oil equivalent (MMBoe), (including reserves attributable to its 34.7% equity interest in the proved reserves of Blue Eagle), of which 53% were classified as proved developed, 54% were oil and natural gas liquids (NGL��) and 94% by PV-10 were operated. Its daily net production during the year ended December 31, 2011, was 3,484 barrels of oil equivalent per day, of which 45% was oil or liquids. Its oil and gas assets are located in four operating regions in the United States, the Rocky Mountain, Mid-Continent, Permian Basin and onshore Gulf Coast, and in the province of Alberta, Canada.

The Company�� properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana and in the Green River, Powder River and Unita Basins of Wyoming and Utah. In this region, its wells produce oil and gas from various reservoirs, including the Niobrara, Turner, Bakken and Three Forks formations. Well depths range from 7,000 feet down to 14,000 feet. The Company�� properties in the Mid-Continent region are primarily located in the Arkoma Basin and principally produce gas from the Hartshorne coals at 3,000 feet. Its properties in the Permian Basin region are primarily located in two sub-basins, the Delaware Basin and the Eastern Shelf. In the Delaware Basin, its wells are located in Pecos, Reeves, and Ward Counties, Texas and produce oil and gas from multiple stacked formations from the Bell Canyon at 5,000 feet down to the Ellenburger at 16,000 feet.

In the Eastern Shelf, its wells are principally located in Coke, Scurry, Midland, Mitchell and Nolan Counties, Texas and produce oil and gas from the Strawn Reef formation at 5,000 to 7,500 feet and oil from the shallower Clea! rfork formation at depths ranging from 2,300 to 3,300 feet. The Company�� properties in the onshore Gulf Coast region are located along the Edwards trend in DeWitt and Lavaca Counties, Texas and in the Portilla field in San Patricio County, Texas. In the Edwards trend, its wells produce gas from the Edwards formation at a depth of 14,000 feet and in the Portilla field, its wells produce oil and gas from the Frio sands and the deeper Vicksburg from depths of approximately 7,000 to 9,000 feet. In addition, the Company also owns a 34.7% equity interest in a joint venture targeting the Eagle Ford in South Texas. Its properties in the province of Alberta, Canada are located in the Pekisko fairway and the Nordegg/Tomahawk area of Central Alberta.

As of December 31, 2011, the Company leased approximately 20,835 net acres, primarily in counties located on the Nesson Anticline and in areas west, including Rough Rider and Lewis & Clark in North Dakota and in Sheridan County, Montana, which are prospective for the Bakken and Three Forks formations. During the year ended December 31, 2011, the Company drilled two operated wells and participated in an additional 19 gross (1.0 net) non-operated wells. In July 2011, Abraxas purchased a used Oilwell 2000 horsepower diesel electric drilling rig. In August 2010, the Company formed a joint venture, Blue Eagle, with Rock Oil to develop its acreage in the Eagle Ford Shale play. As of December 31, 2011, the Company owned a 34.7% interest in Blue Eagle. During 2011, Blue Eagle drilled, completed or participated in three gross (2.4 net) wells and added approximately 3,800 net acres to its holdings, principally in McMullen County, Texas.

As of December 31, 2011, the Company leased a total of approximately 20,720 gross (17,800 net) acres in the southern Powder River Basin, of which 17,800 gross (15,700 net) acres were located in the Brooks Draw field of Converse and Niobrara Counties, Wyoming. In addition, it owns approximately 2,100 net acres in sout! hern Camp! bell County, Wyoming which are held by production and are near the Crossbow field operated by EOG Resources, Inc. and other recent horizontal activity. As of December 31, 2011, the Company leased 6,880 net acres in western Alberta. In 2011, it drilled or completed six gross (6 net) wells in the Twining area. In the emerging southern Alberta Basin Bakken play of Toole and Glacier Counties, Montana, the Company leased approximately 10,000 gross/net acres under long-term leases or direct mineral ownership. As of December 31, 2011, it leased approximately 5,600 gross/net acres in Nolan County, Texas. In 2011, the Company drilled three wells in the Spires Ranch offsetting the prolific Nena Lucia field.

Advisors' Opinion:

• [By Tyler Crowe]

  In the energy world, it's never much of a surprise when an oil company picks up natural gas assets or vice versa. But a coal company getting into the oil business? Now that's a rarity. This week, Natural Resources Partners (NYSE: NRP  ) �did just that. The company announced that it's taking a working interest in some of Abraxas Petroleums (NASDAQ: AXAS  ) assets in the Bakken. While the $35 million purchase was not that large, it's a rare case where a coal company branches out into other natural resources.�

5 Best Oil Stocks To Invest In Right Now: Phillips 66 (PSX)

Phillips 66 is a holding company. The Company is engaged in producing natural gas liquids (NGL) and petrochemicals. The Company operates in three segments: the Refining and Marketing (R&M) segment, the Midstream segment and the Chemicals segment. The Refining and Marketing (R&M) segment purchases, refines, markets and transports crude oil and petroleum products, mainly in the United States, Europe and Asia, and also engages in power generation activities. The Midstream segment gathers, processes, transports and markets natural gas, and fractionates and markets NGL, predominantly in the United States. The Chemicals segment manufactures and markets petrochemicals and plastics on a worldwide basis. The Company�� operations encompass 15 refineries with a gross crude oil capacity of 2.8 million barrels per day, 10,000 branded marketing outlets and 7.2 billion cubic feet per day of gross natural gas processing capacity.

R&M

The Company�� R&M segment primarily refines crude oil and other feedstocks into petroleum products (such as gasolines, distillates and aviation fuels); buys, sells and transports crude oil; and buys, transports, distributes and markets petroleum products. This segment also engages in power generation activities. R&M has operations in the United States, Europe and Asia.

The Company�� Bayway Refinery is located on the New York Harbor in Linden, New Jersey. The refinery produces a high percentage of transportation fuels, such as gasoline, diesel and jet fuel, as well as petrochemical feedstocks, residual fuel oil and home heating oil. Its Trainer Refinery is located on the Delaware River in Trainer, Pennsylvania. Refinery facilities include fluid catalytic cracking units, hydrodesulfurization units, a reformer and a hydrocracker. The Alliance Refinery is located on the Mississippi River in Belle Chasse, Louisiana. The single-train facility includes fluid catalytic cracking units, hydrodesulfurization units and a reformer and aromatics unit. Alli! ance produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel. Other products include petrochemical feedstocks, home heating oil and anode petroleum coke.

The Lake Charles Refinery is located in Westlake, Louisiana. Its facilities include crude distillation, fluid catalytic cracker, hydrocracker, delayed coker and hydrodesulfurization units. The refinery produces a percentage of transportation fuels, such as gasoline, off-road diesel and jet fuel, along with home heating oil. It owns a 50% interest in Excel Paralubes, a joint venture which owns a hydrocracked lubricant base oil manufacturing plant located adjacent to the Lake Charles Refinery. The Sweeny Refinery is located in Old Ocean, Texas, approximately 65 miles southwest of Houston. Refinery facilities include fluid catalytic cracking, delayed coking, alkylation, a continuous regeneration reformer and hydrodesulfurization units. It produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel. Other products include petrochemical feedstocks, home heating oil and coke.

The Company�� Merey Sweeny, L.P. (MSLP) owns a delayed coker and related facilities at the Sweeny Refinery. Fuel-grade petroleum coke is produced as a by-product and becomes the property of MSLP. The Company owns 50% operating interest in Sweeny Cogeneration, a joint venture, which owns a simple cycle, cogeneration power plant located adjacent to the Sweeny Refinery. The plant generates electricity and provides process steam to the refinery, and it also provides merchant power into the Texas market.

The Company�� Wood River Refinery is located in Roxana, Illinois, about 15 miles northeast of St. Louis, Missouri, at the convergence of the Mississippi and Missouri rivers. Operations include three distilling units, two fluid catalytic cracking units, hydrocracking, coking, reforming, hydrotreating and sulfur recovery. The refinery produces a percentage of transportation fuels, such as gasoline,! diesel a! nd jet fuel. Other products include petrochemical feedstocks, asphalt and coke. Its Borger Refinery is located in Borger, Texas, in the Texas Panhandle, approximately 50 miles north of Amarillo. The refinery facilities consist of coking, fluid catalytic cracking, hydrodesulfurization and naphtha reforming, in addition to a 45,000-barrels-per-day NGL fractionation facility. It produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel, as well as coke, NGL and solvents.

The Ponca City Refinery is located in Ponca City, Oklahoma. It is a high-conversion facility, which includes fluid catalytic cracking, delayed coking and hydrodesulfurization units. It produces a range of products, including gasoline, diesel, jet fuel, liquefied petroleum gas (LPG) and anode-grade petroleum coke. The Billings Refinery is located in Billings, Montana. Its facilities include fluid catalytic cracking and hydrodesulfurization units. The Ferndale Refinery is located on Puget Sound in Ferndale, Washington, approximately 20 miles south of the United States-Canada border. Facilities include a fluid catalytic cracker, an alkylation unit, a diesel hydrotreater and an S-Zorb unit. The Los Angeles Refinery consists of two linked facilities located about five miles apart in Carson and Wilmington, California. The San Francisco Refinery consists of two facilities linked by a 200-mile pipeline. The Santa Maria facility is located in Arroyo Grande, California, about 200 miles south of San Francisco.

As of December 31, 2011, the Company marketed gasoline, diesel and aviation fuel through approximately 8,250 marketer-owned or -supplied outlets in 49 states. At December 31, 2011, its wholesale operations utilized a network of marketers operating approximately 6,875 outlets that provided refined product offtake from its refineries. In addition to automotive gasoline and diesel, it produces and markets aviation gasoline, which is used by smaller piston engine aircrafts. As December 31, 2011,! aviation! gasoline and jet fuel were sold through dealers and independent marketers at approximately 875 Phillips 66-branded locations in the United States.

The Company manufactures and sells automotive, commercial and industrial lubricants, which are marketed worldwide under the Phillips 66, Conoco, 76 and Kendall brands, as well as other private label brands. It also manufactures Group II and import Group III base oils and market both globally under the respective brand names Pure Performance and Ultra-S. It manufactures and markets graphite and anode-grade petroleum cokes in the United States and Europe for use in the global steel and aluminum industries. It also manufacture and market polypropylene to North America under the COPYLENE brand name. Its ThruPlus Delayed Coker Technology, a process for upgrading heavy oil into higher value, light hydrocarbon liquids, was sold in June 2011. In October 2011, it sold Seaway Products Pipeline Company to DCP Midstream. In December 2011, the Company sold its 16.55% interest in Colonial Pipeline Company and its 50% interest in Seaway Crude Pipeline Company. The Company manufactures and sells a variety of specialty products, including pipeline flow improvers and anode material for high-power lithium-ion batteries. Its specialty products are marketed under the LiquidPower and CPreme brand names.

The Company owns four refineries outside the United States: the Humber Refinery, Whitegate Refinery, Melaka Refinery and Wilhelmshaven Refinery. The Humber Refinery is located on the east coast of England in North Lincolnshire, United Kingdom. It is an integrated refinery, which produces a high percentage of transportation fuels, such as gasoline and diesel. Humber�� facilities encompass fluid catalytic cracking, thermal cracking and coking. The refinery has two coking units with associated calcining plants, which upgrade the heaviest part of the crude barrel and imported feedstocks into light oil products and graphite and anode petroleum cokes.

!

Th! e Whitegate Refinery is located in Cork, Ireland. The refinery primarily produces transportation fuels, such as gasoline, diesel and fuel oil, which are distributed to the inland market, as well as being exported to Europe and the United States. It also operate a crude oil and products storage complex consisting of 7.5 million barrels of storage capacity and an offshore mooring buoy, located in Bantry Bay, about 80 miles southwest of the refinery in southern Cork County.

The Mineraloelraffinerie Oberrhein GmbH (MiRO) Refinery, located on the Rhine River in Karlsruhe in southwest Germany, is a joint venture in which it owns an 18.75% interest. Facilities include three crude unit trains, fluid catalytic cracking, petroleum coking and calcining, hydrodesulfurization units, reformers, isomerization and aromatics recovery units, ethyl tert-butyl ether (ETBE) and alkylation units. MiRO produces a percentage of transportation fuels, such as gasoline and diesel. Other products include petrochemical feedstocks, home heating oil, bitumen, and anode- and fuel-grade petroleum coke. The Wilhelmshaven Refinery is located in the northern state of Lower Saxony in Germany, and has a 260,000 barrels-per-day crude oil processing capacity.

As of December 31, 2011, the Company had approximately 1,430 marketing outlets in its European operations, of which approximately 900 were Company-owned and 330 were dealer-owned. It also held brand-licensing agreements with approximately 200 sites. Through its joint venture operations in Switzerland, it also has interests in 250 additional sites.

Midstream

The Midstream segment purchases raw natural gas from producers, including ConocoPhillips, and gathers natural gas through pipeline gathering systems. Its Midstream segment is primarily conducted through its 50% investment in DCP Midstream. DCP Midstream also owns or operates 12 NGL fractionation plants, along with propane terminal facilities and NGL pipeline assets. It has a 25% inte! rest in R! ockies Express Pipeline LLC (REX).

Chemicals

The Chemicals segment consists of its 50% investment in CPChem. As of December 31, 2011, CPChem owned or had joint-venture interests in 38 manufacturing facilities. CPChem�� business is structured around two primary operating segments: Olefins & Polyolefins (O&P) and Specialties, Aromatics & Styrenics (SA&S). The O&P segment produces and markets ethylene, propylene, and other olefin products, which are primarily consumed within CPChem for the production of polyethylene, normal alpha olefins, polypropylene and polyethylene pipe. The SA&S segment manufactures and markets aromatics products, such as benzene, styrene, paraxylene and cyclohexane, as well as polystyrene and styrene-butadiene copolymers.

Advisors' Opinion:

• [By Tyler Crowe]

  The countries with little domestic production pay a much higher premium for oil, and companies located all over the world will flock to capture those markets, even ones in the U.S. At the end of 2012, Valero (NYSE: VLO  ) , Phillips 66 (NYSE: PSX  ) and Marathon Petroleum (NYSE: MPC  ) combined to export 531,000 barrels of refined petroleum products from American refiners to premium markets around the world. Furthermore, all three of these companies have stated that they intend to significantly expand export capacity in the upcoming years.

5 Best Oil Stocks To Invest In Right Now: Genesis Energy LP (GEL)

Genesis Energy, L.P. (Genesis) is a limited partnership focused on the midstream segment of the oil and gas industry in the Gulf Coast region of the United States, primarily Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida and in the Gulf of Mexico. The Company has a portfolio of customers, operations and assets, including pipelines, refinery-related plants, storage tanks and terminals, barges and trucks. Genesis provides an integrated range of services to refineries, oil, natural gas and carbon dioxide (CO2) producers, industrial and commercial enterprises that use sodium hydrosulfide (NaHS) and caustic soda, and businesses that use CO2 and other industrial gases. The Company operates in three segments: Pipeline Transportation, Refinery Services, and Supply and Logistics. In August 2011, the Company acquired black oil barge transportation business of Florida Marine Transporters, Inc. In November 2011, it acquired a 90% interest in a 3,500 barrel per day refinery located in Converse County, Wyoming, including 300 miles of abandoned 3- 6 pipeline. On January 3, 2012, it acquired interests in several Gulf of Mexico crude oil pipeline systems, including its 28% interest in the Poseidon pipeline system, its 29% interest in the Odyssey pipeline system, and its 23% interest in the Eugene Island pipeline system. In August 2013, the Company announced that it has completed the acquisition of all the assets of the downstream transportation business of Hornbeck Offshore Transportation, LLC (Hornbeck).

Pipeline Transportation

The Company transports crude oil and carbon dioxide (CO2) for others for a fee in the Gulf Coast region of the United States through approximately 550 miles of pipeline. Its Pipeline Transportation segment owns and operates three crude oil common carrier pipelines and two CO2 pipelines. Its 235-mile Mississippi System provides shippers of crude oil in Mississippi indirect access to refineries, pipelines, storage terminals and other crude oil infrastructure ! located in the Midwest. Its 100-mile Jay System originates in southern Alabama and the panhandle of Florida and provides crude oil shippers access to refineries, pipelines and storage near Mobile, Alabama. The Company�� 90-mile Texas System transports crude oil from West Columbia to several delivery points near Houston. Its crude oil pipeline systems include access to a total of approximately 0.7 million barrels of crude oil storage.

The Company�� Free State Pipeline is an 86-mile, 20 CO2 pipelines that extends from CO2 source fields near Jackson, Mississippi, to oil fields in eastern Mississippi. It has a twenty-year transportation services agreement (through 2028) related to the transportation of CO2 on its Free State Pipeline.

Refinery Services

Genesis provides services to eight refining operations located in Texas, Louisiana and Arkansas, which operates storage and transportation assets in relation to its business and sell NaHS and caustic soda to industrial and commercial companies. The refinery services involve processing refiner�� sulfur (sour) gas streams to remove the sulfur. The refinery services also include terminals and it utilizes railcars, ships, barges and trucks to transport product. Its contracts are long-term in nature and have an average remaining term of four years.

Supply and Logistics

The Company provides services to Gulf Coast oil and gas producers and refineries through a combination of purchasing, transporting, storing, blending and marketing of crude oil and refined products, primarily fuel oil. It has access to a range of more than 250 trucks, 350 trailers and 50 barges with 1.5 million barrels of terminal storage capacity in multiple locations along the Gulf Coast, as well as capacity associated with its three common carrier crude oil pipelines.

Advisors' Opinion:

• [By Aimee Duffy]

  Distributions are incredibly important to master limited partnerships -- they are the reason many investors buy in, and ultimately what drive the market performance for this asset class. As news of distribution increases trickle in for the third quarter, Fool.com contributor Aimee Duffy takes a look at the payouts from Genesis Energy (NYSE: GEL  ) , Plains All American Pipeline (NYSE: PAA  ) , and Memorial Production Partners (NASDAQ: MEMP  ) , as all three MLPs are leading the way with the biggest distribution increases.

• [By Seth Jayson]

  Genesis Energy (NYSE: GEL  ) is expected to report Q2 earnings around July 9. Here's what Wall Street wants to see:

  The 10-second takeaway
  Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Genesis Energy's revenues will grow 30.3% and EPS will grow 52.2%.

• [By Matt DiLallo]

  Genesis Energy (NYSE: GEL  )
  The final stock to get on your dividend watchlist is Genesis Energy. The company's business is split between pipeline transportation, refinery services, and supply and logistics, as you can see on the slide below. In addition to the assets it already has on the books, Genesis has a number of projects in the pipeline to drive future growth. Genesis estimates that these projects will enable it to provide distribution growth to investors in the low double digits well into the future. Genesis has quite the history to back those estimates up as the company has 31 consecutive quarters of distribution increases, including 26 which were more than 10%. That's what makes this dividend-paying stock one to watch.

Top 5 Cheap Companies To Buy For 2014

For many investors, May is value investing month. It's when the cheapskates come together to celebrate all things Warren Buffett and Charlie Munger at the Berkshire Hathaway annual meeting in Omaha.

And yet history shows that sometimes the best value stocks are expensive at purchase. That's certainly been true of Apple (NASDAQ: AAPL  ) in years past and Amazon.com (NASDAQ: AMZN  ) for, well, ever. Both stocks have shown investors generous returns despite having traded for more than 100 times earnings at various points in their history, says Tim Beyers of�Motley Fool Rule Breakers and�Motley Fool Supernova in the following video.

Don't obsess over strict value investing principles. Instead, follow Buffett's own advice to avoid spending time valuing declining businesses. Look for rich opportunities led by healthy, growing enterprises such as Apple and Netflix (NASDAQ: NFLX  ) , which Tim says are his top two holdings.

Do you adhere to strict value investing principles? Please watch the video to get Tim's full take, and then talk about your top two holdings in the comments box below.

Top 5 Cheap Companies To Buy For 2014: Alliance Holdings GP L.P.(AHGP)

Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. The company operates nine underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. As of December 31, 2010, it had approximately 697.4 million tons of proven and probable coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, the company leases land; and operates a coal loading terminal, with a capacity of 8.0 million tons with ground storage of approximately 60,000 to 70,000 tons, on the Ohio River at Mt. Vernon, Indiana. Further, it engages in purchasing and selling coal; and providing services, including ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. Alliance GP, LLC, serves as the general partner of the company. Allian ce Holdings GP, L.P. is based in Tulsa, Oklahoma.

Advisors' Opinion:

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Alliance Holdings GP (Nasdaq: AHGP  ) , whose recent revenue and earnings are plotted below.

Top 5 Cheap Companies To Buy For 2014: Oracle Corporation(ORCL)

Oracle Corporation, an enterprise software company, develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. It licenses of database and middleware software, including database management software, application server software, service-oriented architecture and business process management software, data integration software, business intelligence software, identity and access management software, content management software, portals and user interaction software, development tools, and Java; and applications software comprising enterprise resource planning, customer relationship management, enterprise performance management, supply chain management, business intelligence applications, enterprise portfolio project management, Web commerce, and industry-specific applications software. The company also offers customers with rights to unspecified software product upgrades and maintenance releases; Internet access to technical content; and Internet and telephone access to technical support personnel. In addition, its hardware systems products consist of computer server and hardware-related software, including the Oracle Solaris Operating System; and storage products, such as tape, disk and networking solutions for open systems and mainframe server environments. Its hardware systems support solutions include software updates for the software components. Further, the company offers consulting solutions in business and IT strategy alignment, enterprise architecture planning and design, initial product implementation and integration, and ongoing product enhancements and upgrades; cloud services, including Oracle Cloud Services and Advanced Customer Services; and education solutions comprising instructor-led, media-based, and Internet-based training in the use of its software and hardware products. The company was founded in 1977 and is headquartered in Redwood Ci ty, California.

Advisors' Opinion:

• [By Alex Dumortier, CFA]

  An interesting fundamental story
  Yesterday afternoon, enterprise software provider Oracle (NYSE: ORCL  ) announced results for its fiscal fourth quarter ended May 31. Earnings per share were up 5% (excluding items), and the company announced a doubling in its dividend to $0.12 per share and an additional $12 billion for its existing share-repurchase program. The market's reaction? Unimpressed, to say the least: Shares are down 8.6%. What's the problem?

• [By Paul Ausick]

  Oracle Corp. (NYSE: ORCL) also lost share and posted lower revenues, while fifth place Cisco Systems Inc. (NASDAQ: CSCO) gained 1.5% of market share and saw revenues rise by 42.6%. Cisco�� total second-quarter revenues, however, amounted to just $537 million.

• [By Rich Duprey]

  Wearing the dunce cap
  Not nearly as dramatic a drop or for reasons as good as those that brought Exide low, Teradata (NYSE: TDC  ) tumbled 7.5% yesterday after analysts at Morgan Stanley removed the stock from their "Best Ideas" list. While that seems like a pretty specious reason for investors to dump the stock, the analyst also cut her revenue and profit estimates as industry rivals like Oracle� (NYSE: ORCL  ) and Tibco Software� (NASDAQ: TIBX  ) experience a slowdown in growth.

Best Energy Companies To Buy For 2014: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

• [By Dan Caplinger]

  The evolution of Dow tech
  Technology stocks have played a role in the Dow for a long time. Ever since IBM (NYSE: IBM  ) went beyond typewriters to build computers, technology and industrial manufacturing have gone hand in hand.

• [By Alex Planes]

  I can speak computer. Can you?
  IBM (NYSE: IBM  ) released the first FORTRAN compiler to the public on April 19, 1957. The first trial run, at Westinghouse, produced an error message due to a missing comma, and from there on the language would spread rapidly throughout the field of high-performance computing, much of which used IBM mainframes and was thus already well-equipped to use it.

Top 5 Cheap Companies To Buy For 2014: AeroVironment Inc.(AVAV)

AeroVironment, Inc. designs, develops, produces, and supports unmanned aircraft systems (UAS), and efficient energy systems for various industries and governmental agencies. Its UAS provide intelligence, surveillance, and reconnaissance, including real-time tactical reconnaissance, tracking, combat assessment, and geographic data to the small tactical unit or individual war fighter. The UAS wirelessly transmit critical live video and other information generated by their payload of electro-optical or infrared sensors directly to a hand-held ground control system, enabling the operator to view and capture images during the day or at night on a hand-held ground control unit. AeroVironment also provides spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support for the UAS. In addition, the company produces industrial productivity and clean transportation solutions for commercial and government customers, develops potential clean t ransportation solutions, and performs contract engineering services; offers PosiCharge electric vehicle charging systems for industrial electric material handling fleets, electric vehicle charging systems for passenger and fleet vehicles, and power cycling and test systems for developers and manufacturers of plug-in electric and hybrid vehicles, as well as battery packs, electric motors, and fuel cells; and supplies power cycling and test systems to research and development organizations that focus on developing electric propulsion systems, electric generation systems, and electricity storage systems. It supplies its UAS primarily to the organizations within the United States department of defense. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Monrovia, California.

Advisors' Opinion:

• [By Rich Smith]

  AlamyA US Navy X-47B Unmanned Combat Air System aircraft is towed into the hanger bay aboard the aircraft carrier USS George H.W. Bush -- the first aircraft carrier to successfully catapult launch an unmanned aircraft from its flight deck. With a fiscal 2013 defense budget of nearly $614 billion, the United States is widely known to be a big spender on defense. By some estimates, U.S. defense spending accounts for nearly 60 percent of the $1.19 trillion the top 10 military powers spent on defense in 2011. In fact, our country allocates more than five times more money to defense than does its closest spending rival, China. And that's not the half of it. In the cutting-edge field of military unmanned aerial vehicles, the United States has such a huge lead over its rivals that it makes their combined UAV fleets look like a rounding error in a world that's essentially 100 percent dominated by U.S. drones. Pax Americana As The Wall Street Journal recently reported, the U.S. military commands a fleet of 429 "large drone" aircraft such as the General Atomics Predator and Northrop Grumman (NOC) Global Hawk. Meanwhile, America's smaller drones, built by everyone from Boeing (BA) to Textron (TXT) to tiny AeroVironment (AVAV), maker of the ubiquitous Raven man-portable UAV, number in the thousands. In contrast, the military of the United Kingdom, not even a U.S. rival but a close ally, boasts a fleet of precisely 10 large drones, most of which we built for them, and the rest imported from Israel. Italy has nine, France, four, and Germany has three. As a result, when allied forces need a drone to "put eyes" on a target, more often than not, they have to ring up the U.S. military to get one. Who You Gonna Call? For allied nations, that has to be embarrassing -- but it's a situation unlikely to change soon. As the Journal reports, European defense giant European Aeronautic Defence & Space (EADSY), the parent company of Airbus, is only just now beginning to test a

• [By Chris Hill]

  In this installment of Investor Beat, Andy and Jason explain why they're keeping a close eye on shares of AeroVironment (NASDAQ: AVAV  ) and Barnes & Noble (NYSE: BKS  ) .

• [By Rich Smith]

  President Obama just released his 2014 proposed defense budget -- and it's chock-full of nada for investors in the fledgling drone/unmanned aerial vehicle industry. What does the lack of funding for drones portend for such manufacturers as General Atomics, Northrop Grumman (NYSE: NOC  ) , �AeroVironment (NASDAQ: AVAV  ) , and Textron (NYSE: TXT  ) ?

Top 5 Cheap Companies To Buy For 2014: Ford Motor Credit Company(F)

Ford Motor Company primarily develops, manufactures, distributes, and services vehicles and parts worldwide. It operates in two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside of North America. It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, this sector provides retail customers with a range of after-sale vehicle services and products in the areas, such as maintenance and light repair, heavy repair, collision repair, vehicle accessories, and extended service contracts under the Ford Service, Lincoln Service, Ford Custom Accessories, Ford Extended Service Plan, and Motorcraft brand names. The Financial Services sector offers vari ous automotive financing products to and through automotive dealers. It offers retail financing, which includes retail installment contracts for new and used vehicles; direct financing leases; wholesale financing products that comprise loans to dealers to finance the purchase of vehicle inventory; loans to dealers to finance working capital, purchase real estate dealership, and/or make improvements to dealership facilities; and other financing products, as well as provides insurance services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan.

Advisors' Opinion:

• [By Morgan Housel]

  It's already more than a theory. The new fleets of vehicles being produced by Ford (NYSE: F  ) and General Motors (NYSE: GM  ) have a common denominator: A forceful push away from power and size toward efficiency. Whether it's an SUV or a tiny commuter car, efficiency now sells, and that's what automakers are delivering.

• [By Adam Levine-Weinberg]

  The U.S. full-size pickup market is incredibly lucrative for automakers, producing as much as $10,000 in profit per vehicle sold. Recently, General Motors (NYSE: GM  ) has been a step behind segment-leader Ford (NYSE: F  ) in this market. Combined sales of the Chevy Silverado and GMC Sierra were approximately 575,000 last year, while Ford sold 645,000 of its F-Series trucks.

5 Big Trades to Take for a Fed Taper

BALTIMORE (Stockpickr) -- Here we go again. The latest round of Fed minutes revealed that a QE taper might be in the works, kicking speculation into full gear again and posting moderate losses for all three major indices yesterday.
P/>>>Profit From 5 Trades Warren Buffett Made

If the Fed starts shutting off the faucet, it puts the stock rally at risk -- or at least that's what investors are worrying about.

But what else is new? There's constantly been some big black cloud grabbing the market headlines all year long. But from a technical standpoint, this rally isn't showing any signs of slowing just yet. Focusing on high-probability trades is still the key to wringing out gains in the final quarter of the year, taper or not.

Today, I'll show you a closer technical look at five of them.

If you're new to technical analysis, here's the executive summary.

Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.

Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.

Polaris Industries

Shareholders in Polaris Industries (PII) are having a stellar year in 2013; shares of the $9 billion ATV manufacturer are up more than 55% since the calendar flipped over to January. But even if you missed the move, you shouldn't ignore this stock. PII looks like it's still got higher ground ahead of it.

That's because Polaris is currently forming an ascending triangle pattern, a bullish price setup that's formed by a horizontal resistance level above shares at $137 and uptrending support to the downside. Basically, as PII bounces in between those two technical levels, it's getting squeezed closer and closer to a breakout above $137. When that happens, we've got a buy signal in shares.

Berkshire is currently forming a descending triangle pattern, the bearish opposite of the ascending triangle in PII. The descending triangle is formed by downtrending resistance pushing down from above shares and horizontal support to the downside, in this case at $111. A breakdown through $111 is Berkshire's sell signal.

A parabolic drop in relative strength since June indicates that Berkshire has been woefully underperforming the S&P 500 in recent months -- you can see it from the stock's inability to make new highs in November. Buyers look anemic here, but failure to catch a bid at $111 is the start of something bigger.

Don't sell unless Warren Buffett's baby unless shares fall through that price floor.

Hospira

Pharmaceutical firm Hospira (HSP) hasn't done much since July; shares have been trading sideways for months now. But even though Hospira hasn't really participated in the recent rally, there's still a trade to be made here.

Hospira is currently forming a rectangle pattern, a price setup that's formed by a horizontal resistance level above shares at $42 and another horizontal support level down at $38.50. The rectangle gets its name because it essentially "boxes in" shares. The high-probability trade comes when HSP exits its channel -- a move through $42 is a buy signal, whereas a drop below $38.50 is a signal to sell.

Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Rectangles, triangles, and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That $42 resistance level, for example, is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Sit on the sidelines until HSP breaks outside of the rectangle.

BHP Billiton

You don't have to be an expert technical analyst to figure out what's going on in shares of mining and petroleum giant BHP Billiton (BHP) -- the setup in the $112 billion stock is about as basic as it gets. BHP has been bouncing higher in an uptrend since July, hitting a floor on a trendline support level all the way up to today's close.

The channel in BHP is important because it provides us with a high-probability range for shares to stay within both on the upside and the downside. More important, trendline support has halted shares' pullbacks perfectly on the last four touches of the level – now we're hitting touch number-five.

A bounce in today's session is the buy signal in BHP.

Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, we're ensuring the BHP Billiton can actually still catch a bid along that line.

Keep a tight stop in place under the channel if you decide to buy here.

IBM

At first glance the price action in IBM (IBM) looks like it's the opposite of the uptrending channel in BHP -- but a small divergence makes a world of difference for anyone who owns IBM right now. Sure, IBM is trending lower, but its trendlines are converging, indicating that buyers on the downside are halting the selling more quickly in this stock.

The setup in IBM is called a falling wedge, and it's a reversal trade. This pattern has historically been a significant setup to watch – one study puts the falling wedge's ability to spot a reversal at more than 90%. The buy signal comes on a breakout above resistance, a level that IBM is currently testing. Don't be early on this trade -- obviously, IBM could fall materially further and remain within the wedge before a breakout does happen.

When and if shares break above resistance, I'd recommend keeping a protective stop on the other side of IBM's 50-day moving average.

To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

Does Coca-Cola Support a Rising Stock?

With shares of Coca-Cola (NYSE:KO) trading around $38, is KO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Coca-Cola is a beverage company that engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. Its sparkling beverages include carbonated energy drinks, carbonated waters, and flavored waters. The company''s still beverages comprise nonalcoholic beverages, including noncarbonated waters, flavored and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. Coca-Cola Company sells its products primarily under the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, Glacéau Vitaminwater, Georgia, Simply, Del Valle, Ayataka, and I Lohas brand names.

The highly controversial new anti-gay law in Russia is leading to unwanted complications for overseas sponsors of the Sochi Olympic Games set for next year, which include Coca-Cola and McDonald's (NYSE:MCD). The prospect of protests at Sochi against the repressive laws (and presumably the sponsors) is leaving them with an uneasy feeling regarding potential damage to their public images. The law disallows the distribution of information to minors that “promotes” same-sex relationships. Major sponsors like Coca-Cola and McDonald's are worried about the risk of high-profile protests at the Games, and that demonstrations like that could draw attention to them for the wrong reasons and ignite calls for a boycott of their products, such as the one of Florida orange juice back in the 1970s.

T = Technicals on the Stock Chart Are Mixed

Coca-Cola stock has moved higher in the last several years. The stock has struggled to make significant progress this year and is now trading near yearly opening prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Coca-Cola is trading below its key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Coca-Cola options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Coca-Cola Options	18.26%	93%	90%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
October Options	Steep	Average
November Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Coca-Cola’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Coca-Cola look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	-3.28%	-13.33%	13.92%	4.17%
Revenue Growth (Y-O-Y)	-2.57%	-0.92%	3.76%	0.75%
Earnings Reaction	-1.90%	5.68%	-2.71%	-0.60%

Coca-Cola has seen mixed earnings and revenue figures over the last four quarters. From these numbers, the markets have not been pleased with Coca-Cola’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Coca-Cola stock done relative to its peers, Pepsi (NYSE:PEP), Dr. Pepper Snapple (NYSE:DPS), Monster Beverage (NASDAQ:MNST), and sector?

	Coca-Cola	Pepsi	Dr. Pepper Snapple	Monster Beverage	Sector
Year-to-Date Return	6.21%	17.62%	1.83%	3.18%	5.93%

Coca-Cola has been a relative performance leader, year-to-date.

Conclusion

Coca-Cola is an iconic company that provides beverage products through its recognized brands to consumers and companies in just about every country worldwide. The company, a sponsor of Sochi Olympic Games next year, may be seeing unwanted complications due to an anti-gay law in Russia. The stock has moved higher in the last several years but has been struggling to make significant progress this year. Over the last four quarters, earnings and revenues have been mixed which has not really pleased investors. Relative to its peers and sector, Coca-Cola has been a year-to-date performance leader. WAIT AND SEE if Coca-Cola and its sector can improve this quarter.

Abercrombie & Fitch Co (ANF): Lack Of Visibility May Keep Investors On Sidelines

The lack of visibility on merchandise strategy may further pressure shares of Abercrombie & Fitch Co. (NYSE: ANF), which dropped 34 percent in the last six months. The retailer is late to the party on many aspects.

Based in New Albany, Ohio, Abercrombie & Fitch operates as a specialty retailer of casual apparel for men, women, and children under the brand names of Abercrombie & Fitch, Hollister, abercrombie kids, and Gilly Hicks.

For investors, a disciplined inventory strategy is top of mind for 2014 while the company's buzz word was "speed" with a huge focus on improving sourcing and testing nearly 100 percent of the product assortment.

[Related -Abercrombie & Fitch Co. (ANF): Multiple Levers For Greater Profitability]

"While we think improving speed is critical in the face of ANF's soft sales and margins for the last 5 years, it just levels the playing field (as its competitors have already been focused on this), and it really comes down to product," UBS analyst Roxanne Meyer said in a client note.

The company's key initiatives include new marketing (testing for Hollister this holiday; rollout for A&F/Hollister summer 2014); new store fronts; relaunching the loyalty programs with rewards; relaunching websites; and omni-channel inventories (chain rollout in fall 2014).

The timing for some of these initiatives is unknown, and others seem pretty far out from now. Moreover, the market remains skeptical whether ANF's infrastructure is prepared to support all of these initiatives.

[Related -Store Intel: Gap Store (GPS), American Eagle (AEO), Abercrombie (ANF)]

"We note there has been no change in the team, and CEO Mike Jefferies announced he plans to stay on board, which had been a question in many investors' minds," Meyer noted.

There was a lack of details on how the product assortment is going to change aside from women's tops being the biggest opportunity for improvement. Management's timeframe to improve the fashion relevance ! is back to school 2014, still a long time to wait and see.

In addition, the company's focus to improve the relevance of core product may not move the needle as much as hoped given that it is a down trending category across teen. The initiative to reduce the number of floorsets and SKUs seems like a step backwards as it could lead to increased markdown risk with more investment in depth (rather than breadth).

"It seems counterintuitive given that ANF now acknowledges it needs to compete more efficiently vs. fast fashion retailers. Perhaps the focus on store payroll is driving this decision," Meyer said.

The company recently guided to 300-500 bps of operating margin opportunity coming from improving the US business longer term, which is about 40 percent of the total 750-1,250 bps opportunity for margin improvement.

The outlook seems tough to achieve due to limited comfort in ANF's ability to raise average unit retails (AURs) without a meaningful improvement to product.

ANF expects to close 40-50 underperfoming US stores/year while opening 40 smaller ones over the next several. International growth now includes franchises in "tougher markets."

"Management also mentioned testing a store within a store concept for ANF kids, which we don't believe will be received well by A&F's customers," Meyer noted.

Internationally, management admits that Europe is near maturity, and the main focus is on Asia, which could represent $1 billion in sales longer-term. Initially, the focus is on China (FY14: 4-6 stores; target: 100+ stores) and Japan (FY14: 3-5 stores).

"Management also discussed expanding to outlets, which we think could dilute an already fragile and heavily promoted brand. We view outlets (particularly the focus on made-for-outlet product) as a distraction as ANF works to fix the merchandise in its core businesses," Meyer added.

The company has multiple levers (albeit on a long-term basis) to boost its profitability and margins that should help to offs! et extern! al challenges. Management is taking a close, hard look at essentially every aspect of the business. As the findings from this thorough review are implemented, ANF could emerge as a more nimble, agile retailer both in terms of its ability to react on the product side and to leverage its cost structure.

However, as of now, investors may remain on the sidelines given low visibility through the first half of 2014 and the lack of details on improving product and the timeline for speed initiatives.

4 Markets

30-Year Bond: Trade thru the pivot is WEAK and will target 130.12. There is NOT much support at the pivot; We like the upside much better if the bulls can get trade back above any support (131.14). 10-Year Treasury Note: Trade thru the yield seeks 123.25 - but the bulls will defend both 124.075 and 124.015. Trade up thru 123.295 seeks 127.00. 5-Year Treasury Note: Like the bonds, this pivot is NOT very supportive and a failure will slip hard - in this case to 119.17. The bulls do VERY well above 120.255. S&P500 Stock Index: It's ALL about WHO controls this pivot...weakness targets 86.25. We still need to go WITH the bulls on strength. As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video found under the OptionsTV page (top bar). We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow. OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits MrTopStep can be followed on Twitter at twitter.com/MrTopStep For LIVE futures chat, more information on the 10-handle rule and futures educational content CLICK HERE FOR A SEVEN-DAY FREE TRIAL.

Pep Boys Posts Slightly Lower Q2 Comps; Misses Estimates (PBY)

After the bell on Monday, Pep Boys (PBY) posted its Q2 earnings, with comparable sales and EPS coming in lower than last year’s Q2 figures.

The automotive aftermarket service and retail company posted a 1.3% decrease in comparable sales for the quarter. Adjusted operating profit coming in $19.4 million, an increase from last year’s Q2 figure of $15.5 million. The company’s sales for the quarter came in at $527.6 million.

Net earnings for the quarter came in at $5.4 million, or 10 cents per share, which were much lower than last year’s same quarter earnings of $33 million, or 61 cents per share.

Pep Boys missed the analysts’ EPS estimate of 19 cents and revenue estimate of $539.35 million.

PBY shares were up 19 cents, or 1.65%, by market close on Monday. YTD, the company’s stock is up almost 15%.

This state's advisers fumble custody requirements

As Massachusetts Secretary of the Commonwealth William Galvin zeros in on advisers' direct access to client funds, the state examined 50 advisers and found 18 custody deficiencies.

Many investment advisers in Massachusetts who moved from oversight by the Securities and Exchange Commission to the state failed to disclose that they have custody of client assets, according to a new study by the state's securities regulator.

A report released Thursday said that only three of the 102 Massachusetts-based advisers who made the switch had been examined by the SEC in the three years prior to their move to state regulation last year.

Massachusetts examined 50 of those switching advisers between August 2012 and last month and found 18 custody deficiencies. Only 14 of the advisers acknowledged having custody before the examination.

Massachusetts Secretary of the Commonwealth William Galvin is zeroing in on advisers' direct access to client funds because it was a key issue in Bernard Madoff's multibillion-dollar Ponzi scheme.

“With the recent Madoff scandal, we have all seen the risks that can occur when an adviser abuses custody authority,” Mr. Galvin said in a statement, adding that because of the “higher potential for investor harm,” regulatory action is appropriate.

Unlike the SEC, Massachusetts does not exempt an adviser from custody compliance rules if he or she is the executor or a trustee of a trust for a family member or personal friend. The state also deems an adviser to have custody if he or she directly deducts fees from client accounts without filing an invoice.

The Massachusetts report asserted that advisers who switched regulatory bodies did not grasp custody rules in general.

“The SEC's failure to examine a majority of the switch advisers presumably contributed to the switch advisers' misunderstanding of the custody rule requirements,” the report states. “Furthermore, the division's recent examinations have demonstrated that many advisers do not have a complete understanding of what custody actually entails.”

Among other things, if an adviser has custody, he or she must submit to an annual surprise examination by an accounting firm registered with the Public Company Accounting Oversight Board.

The report also said that many of the advisers migrating to Massachusetts oversight had never been subjected to a books-and-records review.

Advisers who haven't been examined, whether they're switching to the states or remaining with the SEC, need to brace themselves, according to Steven Thomas, director of compliance at Lexington Compliance, a division of RIA in a Box.

“These firms are going to have a rude awakening,” said Mr. Thomas, a former South Dakota securities regulator. “They're going to see a lot of deficiency letters. You're going ! to see a lot of books-and-records violations.”

Under the Dodd-Frank financial reform law, about 2,100 investment advisers with assets under management of $25 million to $100 million switched from SEC to state oversight.

Time to Profit From J.C. Penney

NEW YORK (TheStreet) -- After imploding by more than half from the start of the year, buying J.C. Penney (JCP) may feel like stepping out on railroad tracks and stopping a freight train with your hand.

If you're too early, your account can get trampled faster than you can say "margin call," as many have found out. That's the reason why I've been critical of J.C. Penney, especially after they blindsided investors with a 38% share dilution that sent shares falling to multi-year lows. But as the facts change, so must our opinion.

The financial situation is the same, not much has materially improved, but instead of paying over $10 a share, we can now buy the retailer for under $8.50. In fact, I will show you how you can lower your risk to under $7 a share while leaving room of a possible 10% gain in about three months.

A patient and disciplined investor can use market fear of never-ending losses to their advantage by waiting until the dust settles and enough weak hands have thrown in the towel that the stock essentially "runs out of sellers." Of course, every trade has a buyer and seller, but we also know that when buying pressure increases and demand outstrips supply, the overall price of shares will move higher. That's exactly what we are witnessing now with J.C. Penney, and we can expect it to continue. Last month, I gave an opinion that selling $8 strike put options provided a positive expectancy based on the outsized premium in relation to potential risk. After almost six weeks, option writers have been rewarded with considerable time decay. The November strike is about to expire, but that doesn't mean this trade is over. Clearly, J.C. Penney has a full plate of challenges. Kohl's (KSS) Macy's (M) Sears (SHLD) Target (TGT) and Wal-Mart (WMT) are not about to relinquish the non-stop implicit collusion that all department stores have against each other as they individually strategize to gain every possible edge. It's the same highly competitive market space that led Goldman Sachs (GS) to warn J.C. Penney bond holders to buy insurance against default, known as collateralized debt obligations because of fear of default within the next couple of years.

To be sure, senior J.C. Penney bonds encompass less risk than buying stock. If the company goes out of business, bondholders can expect to receive some if not a considerable amount of their investment back. On the other hand, shareholders can expect next to nothing. However, shareholders are also positioned to receive the lion's share of reward if the company gets back on track.

It doesn't even need to get fully on track to profit. Halting the cash burn will pop the shares much higher, and J.C. Penney should have no problem turning around investor's negative perception on its future viability during the holiday season's sales. As someone who has spent years in retail, I know that the holiday season's sales can erase a lot of mistakes.

Keep in mind that the end of the year doesn't spell the end of strong sales. January is one of the best revenue and income producing months. In part, it's the timing of the earnings release along with expected guidance that I believe selling the January $8 put option makes such a strong investment thesis.

At a sales price of $1.05, total J.C. Penney exposure is reduced to $6.95. If the shares decline in value and the options are exercised, the cost basis begins at $6.95, but you can immediately write a call option against it, further reducing risk. If the shares catch a bid and climb to $9.05 you make the same as if you bought the shares outright, albeit with much less risk. Over $9.05 and you forfeit any increase above that amount, but that's offset by the fact if the shares do nothing but sit at $8.35 until option expiration in January you make the full amount, just as if the stock increased in price. For Real Money Pro investors that sold $8 put options a little more than a month ago, that's exactly what happened. The shares dipped in price, and are now about the same, resulting in a profit of the entire option premium provided J.C. Penney closes Friday above $8. Now is a fantastic time to rinse and repeat. At the time of publication, the author was long JCP. Follow @RobertWeinstein This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Typhoon may devastate Philippines’ economy

While it undoubtedly killed many thousands of people, the economic toll on the Philippines from Typhoon Haiyan actually could have been worse.

The storm took an estimated $14 billion toll on Filipino property, according to tktk. But the path of Haiyan meant it imposed only minor damage in and around the capital of Manila -- home to about 12% of the nation's people and a third of its annual economic output of about $430 billion.

The Filipino economy has been growing faster than 7% a year this year, after growing 6.8% in 2012. By Asian standards, that is pretty good -- it's growing faster than India, if slower than China, It is reasonably well diversified, as business-process outsourcing centers and call centers spring up to complement electronics-assembly factrories and agriculture.

A moderate national debt will work in the favor of Filipino recovery, said Rachel van.Elkan, mission chief for the Philippines at the International Monetary Fund. With an investment-grade bond rating and a debt to GDP ratio of 40% -- compared with TK% for the U.S. -- the nation will be able to finance its reconstruction after international aid pours in to address the humanitarian crisis, she said.

``Things have been looking up for the Philippines,'' van Elkan said. ``In our assessment they continue to do so.''

Metro Manila is the center of the nation's financial services business, and also has the largest share of its manufacturing because of its access to ports, van Elkan said. It is also the largest single home of the outsourcing companies that have boosted employment in the Philippines to as many as 900,000 people, according to consiuting firm Tholons.

Cebu, a city of more than 3 million people where major industries include tourism and outsourcing, was heavily damaged by the storm. U.S. companies with operations there include United Healthcare and tktk, according to Filipino press reports.

Until the storm hit, the Philippines' economy had been expected to grow 6.8% this year, accor! ding to the International Monetary Fund, and actually grew more than 7% in the first half of the year. Its government debt has an investment-grade rating, which Fitch Ratings raised earlier this year, and its consumers spend more freely than in some developing nations, but it had weak infrastructure and relatively high unemployment at 7.5% even before the storm hit, according to an analysis by accounting firm Deloitte in September.

Haiyan's total impact may reach $14 billion (U.S. dollars), said economic consulting firm Moody's Analytics. As many as 9.5 million people, or 10% of the population, may have been directly affected by the typhoon, with half the nation's sugar cane fields and a third of its rice-growing land wiped out, Moody's said.

"The economy has weathered global economic and financial downturns better than its regional peers due to minimal exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a rapidly expanding business-process outsourcing industry,'' CIA analysts wrote in the 2013 World Factbook.

Spokespeople for the International Monetary Fund and IHS Global Insight said it's too early to make meaningful estimates of the economic damage.

About 8% of the nation's $430 billion economy comes from money sent back home by emigrants, usually to their families, Fitch said. Another 35% comes from exports.

The $430 billion works out to annual output of about $4,500 per person, placing the Philippines between 122nd and 130th among the 180-plus national economies worldwide, according to analyses by the World Bank, the IMF and the CIA.

Johnson & Johnson Ends Drug Probes with $2.2B Settlement (JNJ)

It was revealed today that Johnson & Johnson (JNJ) will pay $2.2 billion to end civil and criminal investigations; this sum is one of the largest healthcare fraud settlements in history.

The charges were related to the marketing of several drugs, which were allegedly promoted for unapproved uses. These included the drugs Risperdal, Invega, and Natrecor, and their advertising over a multiple year period. The drugs were marketed through a J&J subsidiary named Janssen, which pleaded guilty to a misdemeanor for its promotion of Risperdal.

On top of that, the company had also allegedly been paying out large sums in kickbacks to doctors and institutions that pushed the drugs onto patients. It should be noted that J&J released a statement saying that the settlement is in no way an admission of liability or wrongdoing and that it denies the government’s allegations.

Investors seemed to have a muted reaction, as JNJ was only down 0.37% on the day. The company is currently sitting on over $25 billion in cash, which likely helped to alleviate some of the concerns as to how the settlement would hit the company.