Bullish Look on RRC

I am going to position myself long in RRC using Call Options. I am considering the Feb $45 call for $2.60. I also like the Mar $45 or $46 Calls, which give me a little more time. I do think this chart is set up technically and has a good possibility of attaining $50 in the next 60 to 90 days.

There was a ton of call activity that crossed the tape on Friday January 7th. They were going after the jan and feb strikes. The feb 52.50 saw 5435 contracts traded with a previous Open Interest of 0. So it is evident these were being bought to open. Now keep in mind they can be a hedge if attached with shares sold short.

RRC is in the Natural Gas sector and was downgraded on 1/6/11. Natural Gas prices have been depressed for quite a while now. We have seen a recent push up in Natural Gas prices but keep in mind that there is still an abundance of Natural Gas Supplies.

Aubrey McClendon, is (CHK) Chesapeake Energy's CEO. I consider him to be a sharp individual and a great leader. He invested a ton of his own cash into his company and because of the economic recession, Hedge fund, and Shorts pressuring the stock down, he was forced to sell his common shares because of margin call requirements, taking a large loss I presume. OK, the point I am getting at is, this CEO is confident in his company and its future. He invested a ton of his own cash in his company, which is one of the reasons I like CHK in the Natural Gas sector. Along with it being the largest U.S producer of Natural Gas, it has great management!!

CHK has also hedged about 96% of their Natural Gas production for 2011, Here is an interesting article.http://www.fool.com/investing/general/2011/01/07/chesapeake-finally-takes-its-foot-off-the-pedal.aspx

With that being said, lets get back to RRC. I mention CHK because I much rather own them or APA for that matter, but I am first and foremost a trader and RRC in my opinion offers a better technical setup at this time. I have enclosed a a video with some technical analysis and my thoughts on RRC.

Here is the link to the Video

http://www.screencast.com/t/iuNK9k0pagRz