EnCana (NYSE: ECA - option chain) shares are rising today after the company announced it is planning to split into two companies: a natural gas producer and an integrated oil firm. ECA had originally planned to do this a year ago, but halted the plan after the financial crisis made the move more difficult. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ECA.

ECA opened this morning at $58.27. So far today the stock has hit a low of $57.64 and a high of $59.00. As of 11:40, ECA is trading at $58.52 up $3.89 (7.1%). The chart for ECA looks bullish and S&P gives ECA a positive 4 STARS (out of 5) buy ranking.

"The global oil and gas majors have been brutally wounded since energy prices peaked last July," observes resources expert Eric Roseman.

In his Commodity Trend Alert, he explains, "We believe it's safe to start accumulating these companies again. We're buying one of the largest and best-managed natural gas companies in the world – Encana (NYSE: ECA)."

The advisor notes, "Based in Calgary, Alberta, Encana is Canada's largest natural gas distribution company based on stock market capitalization and natural gas production.

"ECA produces approximately 4.4 billion cubic feet of gas equivalent per day. More than 80% is natural gas - the cleanest burning of all fossil fuels.

I am the Global Editor at MoneyShow.com and each week I interview an investing expert. This week, I spoke with Gordon Pape, editor of The Canada Report, who thinks Toronto may have seen its lows, and he's cautiously optimistic on the loonie, too.

Q. Gordon, since we last spoke, global markets have lost nearly half their value, and the Toronto Stock Exchange's Composite Index has dropped from more than 15,000 to just over 8,700. Have we hit bottom?

A. We are cautiously optimistic, but the recent trillion-dollar bond purchase plan announced by the Federal Reserve is great news for Canada. The flood of cash will likely spur inflation, drive down the value of the US dollar, and raise the price of commodities. It's no surprise that gold [rose] almost $60 an ounce and oil [got] back over $50 a barrel. The Canadian stock market is heavily weighted to commodities, so we are seeing a big lift. I still expect a lot of volatility in the coming months. However, the March 6th TSE low of 7,480 may turn out to have been the bottom for this cycle.

Analyst upgrades:

• Jefferies upgraded shares of Devon Energy (NYSE: DVN) to Buy from Hold on expectations that Haynesville results could be a catalyst in 2009. The firm raised their target to $100 from $94.
  
• Friedman Billings upgraded shares of Republic Services (NYSE: RSG) to Outperform from market Perform following the completed merger with Allied Waste (NYSE: AW).
  
• KeyBanc upgraded NorthWestern (NYSE: NWE) to Buy from HOld as they expect the Montana commission to grant the company's pending request for an accounting order to smooth pension expenses over five years.
• EnCana (NYSE: ECA) was upgraded to Neutral from Sell at Goldman.
  
• Goldman also upgraded Questar (NYSE: STR) to Buy from Neutral.
  
• Kinross Gold (NYSE: KGC) was raised to Outperform from Neutral at Credit Suisse.

Analyst downgrades:

Once again it's ugly out there today. The Dow Jones Industrial Average dropped below 11,000 for the first time in two years, plunging over 2%. The rest of the U.S. stocks are not far behind with both the Nasdaq composite and the S&P 500 down over 2% as well. It's depressing. But you don't have to look far to see a nicer picture, you just have to look up: up north that is.

The Toronto Stock Exchange has fared much better in what has officially become a U.S. bear market. Over the past year, while the S&P 500 sank over 19%, the S&P/TSX Composite index dropped only 3.4%. Year-to-date, while the S&P 500 declined over 16%, the TSX was barely down 1%. And if you stay away from financials on the TSX, you'd fare even better.

How so, you ask, doesn't the Canadian economy closely follows the U.S.'s? It's mostly true as the U.S. is Canada's biggest trading partner and the Canadian economy is intertwined with that of the U.S. For example, some of the layoffs at GM and Ford plants have occurred in Ontario plants, and Canada's unemployment rate edged up to 6.2% in June due to a drop in full-time jobs.

The thing is, though, that the TSX is heavily weighted in mining and oil & gas companies, sectors that have fared better than techs and financials the past year or so. Getting exposure to the Canadian market is very easy since many stocks also trade on U.S. exchanges, the famous of all may be Research in Motion (NASDAQ: RIMM). But there are others, and some of them, the U.S. investor may want to consider.

EnCana (NYSE: ECA) plans to separate into two companies, one focused on oil and the other natural-gas assets.

ECA closed at $85.93 Friday.

Friedman Billings Ramsey says: "The sum-of-the-parts DCF valuation is $92/share based on the company's most reserve data."

ECA over all option implied volatility of 35 is above its 26-week average of 33 according to Track Data, suggesting slightly larger price fluctuations.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Energy companies, Regulated and Diversified Utilities and Tailsman Energy were today's noteworthy upgrades:

• Bernstein raised its 2008 oil forecast to $92.30/bbl, up 27%, and 2008 natural gas forecast to $8.30/mcf, up 7%. By 2012, the firm expects oil prices to be around $86/bbl and for gas to be $9.2/mcf. The firm upgraded Apache Corp (NYSE: APA) and XTO Energy (NYSE: XTO) to Outperform from Market Perform and EnCana (NYSE: ECA) to Market Perform from Underperform.
  
• Goldman upgraded the Regulated and Diversified Utilities sub-sectors to Attractive from Neutral citing expected economic weakness, positive commodity exposure, and earnings growth. The firm upgraded American Electric Power (NYSE: AEP) to Buy from Neutral.
  
• Citigroup upgraded shares of Tailsman Energy (NYSE: TLM) to Buy from Hold ahead of the company's annual meeting as they believe it will announce a new strategy of low risk resource development on existing acreage and that shares will react positively.

OTHER UPGRADES:

• UBS raised Watson Wyatt (NYSE: WW) to Buy from Neutral.
  
• Jefferies upgraded Clear Channel Outdoors (NYSE: CCO) to Buy from Hold.
  
• Bear upgraded Telecom Italia (NYSE: TI) to Peer Perform from Underperform.

Timberland (NYSE: TBL) is recently up 87 cents to $16.64. The Wall Street Journal has frequently reported in the past that TBL is exploring a plan to sell itself. TBL December and January option implied volatility of 48 is near its 26-week average of 46 according to Track Data, suggesting flat price fluctuations.

EnCana (NYSE: ECA), a leading North American natural gas producer, will be holding its 2008 Outlook Meeting on December 12th. WTI Crude Futures are up 0.87% to $88.25 according to Bloomberg. ECA overall option implied volatility of 33 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

David Fried has developed an industry-leading reputation by focusing on companies buying back their shares. Here, his Buyback Letter looks at EnCana Corp. (NYSE: ECA).

"Canadian oil producer EnCana is among the largest holders of oil and gas resource lands in onshore North America, has an extensive drilling inventory with some 40,000 well locations, strong production and reserves growth, and robust project returns. It is focused on natural gas and in-situ oil sands.

"As the dangers of global warming have become more apparent, major energy companies are attempting to capture carbon dioxide and lock it away where it won't trap more heat. Industry leader EnCana has embarked on a pilot project to improve recovery rates from mature oil wells by using carbon dioxide.

"EnCana buys carbon dioxide produced by a power plant and ships it via pipeline to its Weyburn field in southern Saskatchewan. EnCana injects the gas into its oil field, where it reduces the viscosity of the oil, allowing the company to increase its recovery from the field.

What are the best energy investments for long-term investors? To answer this question, I surveyed 20 of the nation's leading financial newsletter advisors to find their current favorite ideas in the energy sector.

Interestingly, the advisors see the best opportunities in areas well beyond traditional oil firms; indeed, no one included in this report chose a major integrated oil company. Rather, the advisors have shown a preference for various oil services sectors, non-oil energy sources, and developing alternative technologies.

Some focus on areas such as deep-sea operations with Diamond Offshore Drilling Inc. (NYSE: DO), Transocean Inc. (NYSE: RIG) and Oceaneering International (NYSE: OII), while others look toward oil shippers such as Nordic American Tanker Shipping (NYSE: NAT) and refiners such as Valero Energy Corp. (NYSE: VLO).

Others chose companies that make specific products needed by the oil & gas industries such as NATCO Group Inc. (NYSE: NTG), which makes a wide range of oil & gas processing systems; Dresser-Rand Group Inc. (NYSE: DRC), a maker of control systems; Gardner Denver Inc. (NYSE: GDI), which makes compressor and fluid transfer systems; Tenaris (NYSE: TS), a maker of pipes and tublar products and Schlumberger Ltd. (NYSE: SLB), the largest and most diversified of the oil services companies.

Got gold? In this edition of StockWatch: Between the Bells, Thomas Winmill of the Midas Funds outlines his strategy for broadening your portfolio with investments in precious metals and foreign energy concerns.

Echoing the sentiments of recent StockWatch contributors, Tom says we're currently in a bull market, and can expect growth to continue, thanks in part to recently lowered interest rates.

Tom recommends investors check into foreign equities -- he favors overseas energy companies like Hong Kong's CNOOC (NYSE: CEO), and EnCana Corporation (NYSE: ECA) of Canada. CNOOC manages China's offshore oil and gas exploration, and currently traded in the $160s, gushing up from around $100 in mid-August. EnCana is one of North America's largest oil and gas distributors, and trades about $20 higher than at the start of 2007.

Tom also urges investors to look beyond stocks and bonds, and suggests devoting between five and ten percent of your portfolio to gold and other precious metals.

If you enjoyed this clip, check out recent StockWatch interviews with MSN Money host and author Timothy Sykes and AOL Money Coach Hilary Kramer.

MOST NOTEWORTHY: DaimlerChrysler (DCX), Omniture (OMTR), Convergys (CVG), Expedia (EXPE) and Baidu.com (BIDU) were today's noteworthy upgrades:

• WestLB upgraded shares of DaimlerChrysler (NYSE: DCX) to Buy from Add after the company raised the profit margin forecast for its Mercedes unit.

• Omniture (NASDAQ: OMTR) was upgraded by Piper Jaffray to Market Perform from Underperform to reflect the company's strong revenue momentum and expanding margins.

• Wedbush upgraded Convergys (NYSE: CVG) to Hold from Sell on valuation.

• Citigroup raised shares of Expedia (NASDAQ: EXPE) and Baidu.com (NASDAQ: BIDU) to Buy from Hold on valuation...

OTHER UPGRADES:

• Bear Stearns upgraded shares of Ryder System (NYSE: R) to Outperform from Underperform.

• Lehman raised EnCana Corp (NYSE: ECA) to Equal Weight from Underweight.

• USG Corp (NYSE: USG) was raised to Neutral from Underperform at Buckingham.

• Morgan Keegan upgraded shares of Panera Bread (NASDAQ: PNRA) to Outperform from Market Perform.

• Citigroup raised Cullen/Frost Bankers (NYSE: CFR) to Hold from Sell.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Building Materials Holding Corp. (NYSE: BLG) -- implied volatility is Calm as BLG closes at 30-month low. BLG, a provider of professional residential services and building materials, closed at $13.41. BLG was frequently mentioned as a takeover target in previous years on a strong housing market and chatter that Home Depot's (NYSE: HD) ex-leader Bob Nardelli would purchase BLG. RHCO says this morning, "Potential for consolidation of Pro Dealers; When will it begin?" BLG June option implied volatility of 41 is below its 26-week average of 44 according to Track Data, indicating decreasing price risks.

Masco Corp. (NYSE: MAS) -- option implied volatility suggests non-directional Risk. MAS, a home improvement company, closed at $29.15. MAS over all option implied volatility of 27 is near its 26-week average of 25 according to Track Data, suggesting slightly larger risks.

Builders FirstSource (NASDAQ: BLDR) -- implied volatility suggests Flat Risk. BLDR, a supplier and manufacturer of structural and related building products for residential new construction, closed at $16.13. BLDR has a market cap of $571 million with long term debt of $318 million. BLDR reported March 2007 quarterly total revenue of $411 million. BLDR over all option implied volatility of 36 is near its 26-week average according to Track Data, suggesting non-directional risk.

BlueLinx Holdings (NYSE: BXC) -- options suggest non-directional risk. BXC, a distributor of building products, closed at $10.88. BXC has a market cap of $339 million with long term debt of $522 million. BXC reported 2006 annual revenue of $4.8 billion. RHCO says, "BXC is maintaining its growth story despite a tough home-building market. The key element is growing its specialty business faster than the structural segment." BXC over all option implied volatility of 40 is near its 26-week average of 42 according to Track Data, suggesting non-directional risk.

Option volume leaders today are: EnCana Corp. (NYSE: ECA), Apple Inc. (NASDAQ: APPL) and Hewlett-Packard (NYSE: HPQ).

Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: General Motors Corp (GM), DaimlerChrysler (DCX), Mattel, Inc (MAT), Nvidia Corp (NVDA) and Advanced Micro Devices (AMD) were today's noteworthy upgrades:

• Lehman upgraded shares of General Motors (NYSE: GM) to Equal-Weight from Underweight with a $30 target following the Chrysler sale as the firm believes GM will now take a tougher stance on its labor negotiations.

• UBS upgraded shares of DaimlerChrysler AG (NYSE: DCX) to Buy from Neutral on the Chrysler sale and valuation. The broker believes the core Daimler unit looks inexpensive.

• Mattel Inc (NYSE: MAT) was upgraded to Buy from Hold at Matrix USA to reflect increasing sales growth.

• ThinkEquity upgraded shares of Nvidia Corp (NASDAQ: NVDA) to Buy from Sell as the firm believes AMD could beat expectations for the next several quarters, likely affecting NVDA's chipset business and driving shares higher.

• ThinkEquity upgraded shares of Advanced Micro Devices (NYSE: AMD) to Buy from Sell citing strong Dell Inc (DELL) orders. Following Nvidia's comments on its quarterly report and channel checks, the firm now believes AMD is poised to beat expectations for the next several quarters and is truly a going concern...

OTHER UPGRADES:

• Citigroup upgraded EnCana Corp (NYSE: ECA) to Hold from Sell.

• BMO Upgraded Las Vegas Sands Corp (NYSE: LVS) to Outperform from Market Perform.

• Banc Of America raised Marathon Oil Corp (NYSE: MRO) to Buy from Neutral with a $125 target.

• Newfield Exploration Co (NYSE: NFX) was upgraded to Outperform from Market Perform at Bernstein.

• Credit Suisse upgraded Ralcorp Holdings, Inc (NYSE: RAH) to Outperform from Neutral.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).