Thursday, April 26, 2007


I like the Nymex (NMX) going into the company's first quarter results. Over the last couple of weeks I noticed that significant buying pre-release is usually a great indicator of a potential estimate beat. The intuition beyond this strategy is that risk-adverse investors usually sell the stock before the earnings in case the stock does miss. If there is strong drive up in the price of the stock, supported by high volume, there may be a large number of investor groups that are speculating that the stock is going to report good numbers. Given that many investors are risk-adverse, NMX chart suggests that these investors feel the stock is a sure winner.

Along with a strong chart, NMX should be posed to show great numbers because of the fluctuation and bullish drive in commodity prices. The volume on the exchange was significant last quarter, and with this increased fluctuation it would be safe to say that these volume numbers should have continued this quarter.

I bought in this yesterday, but I still recommend the stock today. Good luck!

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