12 Best Energy Stocks to Buy Now
OptionsZone Experts, June 3, 2009
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Energy Play #2: United States Gasoline Fund (UGA)
By Nick Atkeson and Andrew Houghton
The United States Gasoline Fund (UGA) is a pure play on U.S. gasoline prices. We are going into a seasonally strong time for U.S. gasoline prices as the summer driving season is about to begin. With households being on the edge of the recession, we may see an increase in vacations taken in the United States by car.
Additionally, with China's economic stimulus programs in full swing, we are seeing stronger demand for gasoline from an increasing number of Chinese who would rather drive than ride a bike or walk.
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Houghton and Atkeson
Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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