A "Shale" Deal

Every so often investors can be lulled into complacency with hopes of endless supplies; wishful thinking around finite resources and the costs associated to extracting them. Recently, Shale has been the new kid on the block, promising exactly that and delivering on the promise – lifting the United States to the coveted spot of largest producer but all that flows is not as it may seem.

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Failed Plan

The plan exited at the final stop loss.

While our barrel count continues to surge, the realities around decline rates and discovery often do not garner the headlines.  Shale has great initial flow through but often has just as steep declines after the 24-30 month time-frame.  Unless more is brought online, the ability to hold the steady supply often can come as quite the surprise to consumers and producers alike.



  Price Shares Cost Returns R/R
Gray Channel
Buy $30.67
$3,987.10  
Reward $40.85 $5,310.50 $1,323.40
Risk $27.68 $3,598.40 ($388.70)
Cancel $34.75    
 
Green Channel
Buy $27.68
$2,989.44  
Reward $36.98 $3,993.84 $1,004.40
Risk $24.04 $2,596.32 ($393.12)
Even $29.31      
 
1st Trade exit @ reward target $820.30  
Total Reward from all applicable channels $1,824.70  
Total Risk from all applicable channels ($1,255.02)  
 
Blue Channel
Buy $26.02
$2,992.30  
Reward $31.10 $3,576.50 $584.20
Risk $24.04 $2,764.60 ($227.70)
Even $28.24      
 
1st Trade exit @ reward target $55.90  
2nd Trade exit @ reward target $369.36  
Total Reward from all applicable channels $1,009.46  
Total Risk from all applicable channels ($1,482.72)  
Gray Channel

3.40:1
reward : risk
level reached 60.42%
Green Channel

2.55:1
reward : risk
level reached 38.16%
Blue Channel

2.57:1
reward : risk
level reached 20.14%

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