Taking Profits On New Fortress Energy

Summary

  • I am selling their entire position in New Fortress Energy due to concerns about short-term natural gas prices and the long-term nature of hydrogen development.
  • They still have a positive long-term outlook on NFE and plan to sell cash-secured puts on any correction of 10-30%.
  • I see volatility coming, which might be an opportunity to take profits now and get back in lower later.

I am selling New Fortress Energy (NFE) out completely.

This position has been profitable by about 25% (after a prior profitable position), but I am concerned about the short-term in the natural gas space. Natural gas prices have been falling and hydrogen development is a very long-term game. In addition, the dual commercial real estate issues in the U.S. and China are concerning enough to me to trade a bit more.

I still like NFE long-term and intend to sell cash-secured puts on any correction of 10-30% which is clearly in the stock’s volatility profile.

I do expect a lot more liquidity at some point this year, as I discussed in:

2024 Futile Forecast: Large Caps & Liquidity

So, while I see volatility, I do not see doom. But, there is opportunity in volatility, so, if you are not a ride it forever person, do at least some trimming in New Fortress Energy, i.e. back to a starter, or sell it outright with the idea you can add it back in coming months.

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