Buy Alert: December 5, 2014

Marcus Haber | December 5, 2014

Buy Alert: December 5, 2014

Trade Details

Buy Encana (ECA) April 15 Calls for $1.25 or better

Why?

Oil and gas could remain inexpensive for quite a while longer. However, that doesn’t mean it’s too early to take advantage of cheap energy companies. Keep in mind, investors will start loading up on opportunities well before the data become conclusive.

ECA is the largest gas producer in Canada and is ramping up activities despite the falling price of oil and gas. The company has stellar fundamentals and is in no danger of cutting its dividend. What’s more, the options are cheap so we can buy all the way out to April.

Let’s buy the April 15 calls here. Conservative investors can take profits at $17. Aggressive investors can hold up to $21. For risk control, conservative traders should exit at $13.50, while more aggressive traders can hold to $12.