Retail traders aren’t just buying the dips on popular names like Tesla (TSLA) and Apple (AAPL). They’re also riding the upward wave on energy stocks — especially small US companies in Texas.
Nine Energy was one of the top trending tickers on Yahoo Finance on Tuesday. The stock is up more than 480% over the last 5 days. On Tuesday morning, Nine (NINE) was halted for volatility amid a massive spike following the release of the Houston-based company’s quarterly results.
A U.S. and UK ban on Russian oil imports, coupled with a ‘de facto ban’ on Russian Urals, has been sending crude futures and energy stocks higher. Occidental Petroleum is up 88% year-to-date. The Houston-based energy company backed by Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) has been one of the top-10 retail-traded names this week according to Nasdaq’s tracker.
“A lot of theses people don’t have futures accounts. It’s not the most common thing to be able to buy crude oil straight up. It’s another way to get exposure to a perceived increase in oil and energy,” Matt Kohrs, retail investing commentator, told Yahoo Finance.
Much of the retail investors’ attention is focused on companies with stocks trading in the single-dollar digit range. On Fidelity Orders by Retail Customers, Nine Energy appears as the No. 5 on the Top Buy & Sell list, followed by Imperial Petroleum (IMPP) at No. 6.
On Stocktwits, the most active ticker symbol on Tuesday was Camber Energy (CEI), based out of Houston, Texas.
“It’s exciting for them [retail traders] to see CEI going from a dollar to two dollars and doubling their money,” said Kohrs. “Most people are looking at this as a swing trade right now. I don’t think they’re saying, ‘Oh I’m buying CEI and I’m holding its for a couple of decades.'”
“I think people are trying to play off the geopolitical developments. If things were to calm down … It’s one thing I preach, and I hope a lot of these people do, is [to be] actually locking in those gains,” he said.
Uri Gruenbaum, CEO and cofounder at TipRanks, a financial data platform, cautions against a trend reversal.
“If the conflict in Ukraine ends soon and Russian oil and gas continues to flow unimpeded to Europe, we are likely to see a sharp decline in oil and gas prices. This could leave some investors vulnerable when the wave they were hoping to ride up comes crashing down,” he said.
The Energy Select Sector SPDR (XLE) is up 40% year-to-date, the only sector with gains 2022.
Ines is a stock market reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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