Analyst Upgrades

• Goodrich (GR) to overweight from neutral at JPMorgan.
• Ford (F) to neutral from underperform and CenterPoint Energy (CNP) to outperform from neutral at Credit Suisse.
• Dollar Financial (DLLR) and Edwards Lifesciences (EW) to buy from hold at Jefferies.
• Alterra Capital (ALTE) to buy from hold at Deutsche Bank.
• Cheesecake Factory (CAKE) and P.F. Chang's (PFCB) to buy from neutral, as well as SunTrust (STI) to neutral from sell, at Janney Capital.
• Arch Capital (ACGL), Axis Capital (AXS), PartnerRe (PRE), Everest Re (RE) and Transatlantic (TRH) to buy from hold, as well as W. R. Berkley (WRB) to hold from sell, at Citigroup.
• Optimer Pharm (OPTR) to buy from neutral at BofA/Merrill.

If last autumn you scooped-up shares of independent natural gas/oil play Southwestern Energy (SWN), which I first wrote about on June 5, 2009, at a price of $42.38, during their late summer swoon, you made the correct call, as SWN, as outlined, bottomed at/near $30.

And it goes without saying that Southwestern's business model remains attractive. The company is likely to record large increases in production in the immediate years ahead, and its low-cost producer status is appealing.

Southwestern Energy (SWN - option chain) shares are rising today after the company forecast 2011 total gas and oil production of 465 to 475 Bcfe, which translates to net income of $555 to $565 million. Analysts have forecast 2011 earnings of $1.83 per share. 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 SWN.

SWN opened this morning at $35.61. So far today the stock has hit a low of $35.49 and a high of $36.46. As of 12:10, SWN is trading at $36.12 up 0.45 (1.3%). The chart for SWN looks bullish and S&P gives SWN a positive 4 STARS (out of 5) buy ranking.

The shares of independent natural gas/oil play Southwestern Energy (SWN), which I first wrote about on June 5, 2009 at a price of $42.38, appear to have found support at/near $30, which bodes well for a continuation of the trade.

Southwestern's business model remains attractive. The company is likely to record large increases in production for the immediate years ahead, and its low-cost producer status is appealing. Due to a low natural gas price, Southwestern will not add any rigs in 2011, but production at its key Fayetteville Shale production zone will likely still increase more than 20% in 2011, after a 30-40% production rise in 2010. Meanwhile, the company's Marcellus area should boast about 35 wells by the end of 2010.

The shares of independent natural gas/oil play Southwestern Energy (SWN), which I first wrote about on June 5, 2009, at a price of $42.38, are trending in the wrong direction: down.

SWN has totally misbehaved during the past 10 months. Specifically, Southwestern Energy's chart has formed a bear-hug -- a bearish technical pattern, and that will have to be reversed for the shares to become attractive again. Hence, the stand aside noted in May remains in-place.

EOG Resources (EOG) closed at $102.99. WTI crude oil futures are recently down 0.15% to $71.40, natural gas futures are down 0.75% to 4.761, according to Bloomberg. EOG overall option implied volatility of 45 is above its 26-week average of 37, according to Track Data, suggesting larger price movement.

Southwestern Energy (SWN) closed at $41.70. SWN overall option implied volatility of 48 is above its 26-week average of 43, according to Track Data, suggesting larger price movement.

CBOE Volatility Index (VIX) at 35.47; 200-day moving average is 22.95.

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

I first wrote about Southwestern Energy (SWN) on June 5, 2009, at a price of $42.38, and shares of independent natural gas/oil play have totally misbehaved during the past five months. Hence, it's probably best to stand aside at this juncture.

Specifically, Southwestern Energy chart has formed a bear hug -- a bearish technical pattern, and that will have to be reversed for the shares to become attractive again.

Baidu (BIDU) closed at $549.16. March put option implied volatility is at 29, April is at 33, June at 40 and September is at 41, versus its 26-week average of 42, according to Track Data, suggesting decreasing near-term price movement.

Financial Select Sector (XLF) closed at $15.35. March put option implied volatility is at 25, April is at 26, June is at 29, versus its 26-week average of 26, according to Track Data.

Three stocks with IV rise on March 9; American Intl Group (AIG) 17%, CMC Metals (CMC) +13%, Southwestern Energy (SWN) +4% according to IVolatility.

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

As analyzed in December 2009, the stock of Southwestern Energy (SWN), which I first wrote about on June 5, 2009, at a price of $42.38, formed a a short-term double-top near $50. But I still like the shares at this juncture, for the following reasons:

First, the sell-off from double-top appears to have found support at/near $41. Second, the mild uptrend dating back to mid-2009 remains in place.

Natural gas/oil play Southwestern Energy's (SWN) uptrend has been milder-than-expected, but investors should view it as an opportunity to scoop-up shares, so I'm reiterating my buy rating for the company, first recommended on June 5, 2009 at a price of $42.38. Here's why:

Southwestern is a cream-of-the-crop play, due to its projected, large increases in production for the immediate years ahead, and its low-cost producer status. Hence, when combined with likely rising natural gas prices, Southwestern should experience large increases cash flow and earnings: SWN is one of the best, low-profile energy companies in the U.S.

Southwestern Energy's (NYSE: SWN) stock has meandered since the June 5, 2009 Buy recommendation at a price of $42.38, but rare is the day you should sell an oil and natural gas play, hence I'm Reiterating the Buy rating.

And the reason is obvious enough: natural gas and oil (which, by the way, was down, but only briefly, and never out) - will represent preferred U.S. energy sources for at least the next decade.

It goes without saying that natural gas/oil plays are favored in this neck of the woods.

And with good reason: natural gas and oil, which, by the way, was down (but only briefly), and never out -- will represent preferred U.S. energy sources for at least the next decade. And with the aforementioned in mind Southwestern Energy Co. (NYSE: SWN) is worth a review.

During July, the prices of oil exploration and coal stocks mentioned in my newsletter tumbled precipitously. For example, Arch Coal (NYSE: ACI) and Peabody Energy (NYSE: BTU) lost roughly a quarter of their value by the end of July and Ultra Petroleum (NYSE: UPL) and Southwestern Energy (NYSE: SWN) which had been up over 40% through June ended July up a relatively paltry 4% and 11% respectively.

I find this interesting because it violates one of the basic theories I have about what moves stock prices. This beat-and-raise theory says that if a company beats earnings estimates and raises its guidance, then the stock will rise. Otherwise it will fall. In the case of these four companies, each of them with the exception of Ultra which did not report, reported doubling or tripling of earnings and raised their guidance.

So why did their stocks fall? In the case of the oil and gas companies, it could be because of declining oil prices. Those peaked at $146 a barrel and recently traded at $127. But I am not aware of any diminution in the price of coal for which demand is strong due to Chinese and Indian infrastructure investment among other factors. Coal is used to make steel and to fire up power plants.