A Second Leg Higher for Commodities Stocks?

I had to close my overnight $LNCO short position at a loss since crude was up, causing some of the beaten down oil stocks to gap up. It was actually a great opportunity to short, as $LNCO and $LINE along with some of the other gapped up commodities stocks faded off the open. I'm not sure the reward would have been there though, since that trade is betting on $LNCO to double barrel when the volatility and range is likely to be lower than the previous day.

I noticed that buyers came into $X and $AKS this morning, which makes sense considering they led the last move, they're now upping their steel prices due to the import duties, and I believe there's still the tariff decision for hot-rolled steel to come. I think March 14 based on message board chatter, but don't hold me to it. 

The strength in crude also forced me to check out oil stocks across the board. Some of the in-play oil stocks have held up surprisingly well, $LNCO and $LINE being some of them. I think this further confirms that you can't predict a stock like $DNR to have gotten crushed in the selloff, at least not on fundamental reasons alone. Selling it too soon was almost certainly the higher EV play.

Seeing certain oil names holding up well and the commodities laggard $BTU move up today on high relative volume leads me to believe that there could be another leg higher for some of these oil stocks. Shorts were salivating when these junk names were flying higher since there is a certain degree of inevitability for some of these names going bankrupt. 

However, in the short term they can still move higher if oil prices trend higher. My plan is to prepare a list of some of the stocks that have been holding up well and buy on the multi-day breakout if the sector confirms the move. These would be short trades and I wouldn't hold longer than one or two days max.

In other news, $TRXC is squeezing higher after the earnings report and in anticipation of FDA approval.

The volume is definitely there. You can see it on both the daily and weekly charts. If there is some constructive sideways action at these levels it could prove to be a nice trade above 4.75. It could run for a dollar or more past that level if you hold until you see a climax buying day. A lot of short sellers have been putting on short positions in this last month (see the streetsweeper report for proof), and the short interest has increased. It reminds me of the price action in $PLUG back in 2014 - lots of  PR and hype fueling the buyers, early short sellers pounding the table about the valuations and the multiple dilutive offerings pushed out by the company the whole way up, and a ton of money to be made by those who know what they're doing.

This would be a short term trade for me since this is a stock I'm not sure I want to hold into the FDA decision. Since we don't know when that FDA decision is, it could come at any time. There's lots of hype and expectation built into this thing already. If for some reason there is no approval, the share price could get cut in half overnight.