(A longer version of this column originally appeared at 11:23 a.m. ET on Jan. 3 on Real Money, our premium site for active traders. Click here to read the full version and get great columns like this from Jim Cramer and other writers even earlier in the trading day.)
Energy firm ONEOK (OKE) soared 132% in 2016, trailing only Nvidia (NVDA) as the year's best-performing S&P 500 component. OKE seems like an odd S&P 500 winner at first glance ... until you consider that it came back from the dead like so many oil-and-gas-related companies did.
Oil-and-gas stocks were really surprise gainers -- not just because they performed so well after oil bottomed earlier in 2016, but also because their fortunes changed so dramatically with the second wind they got from Donald Trump's election victory.
And there's even more to it in ONEOK's case. The company owns 41.2% of ONEOK Partners (OKS) -- one of the nation's largest master limited partnerships, with fabulous positioning in the Permian Basin, the Rocky Mountains and Oklahoma. The latter is perhaps ONEOK Partners' most important asset given the incredible lucrative finds in what are known at the STACK and SCOOP formations. OKE also yields 4.28% even after last year's run, and I think that payout can still grow given all of the projects that the firm has in the hopper (many of which will be completed in the very near term).
We are all aware of the shale revolution, but too often we only think of it as an oil phenomenon and focus on the spectacular growth of the major independents like Cimarex (XEC) , Pioneer Natural Resources (PXD) and Concho Resources (CXO) . Not enough mindshare is given to natural gas, which can be turned into liquids of many kinds or chemicals and plastics with booming markets. Best of all, the United States was for years a natural-gas importer but is now an exporter. While only 2% of our natural gas is now sent out of the country (either to natural-gas-starved Mexico or through the liquefied natural gas terminal owned by Cheniere Energy (LNG) ), we are discovering that we might be both the world's largest and lowest-cost producer. ONEOK is integral to the processing and transportation of a fuel that Donald Trump favors as part of his drive for continental energy independence.
Still, technical analyst Bruce Kamich of our premium site Real Money wrote on Tuesday that OKE's charts show that a "pullback or retracement to key support around $50 ... would not be an unrealistic forecast for the next few weeks." He noted that while ONEOK's daily chart below shows that the stock has moved above its 50- and 200-day moving averages (the gold and blue lines below), OKE's On-Balance-Volume line failed to push to a new high as share prices rose in December:
Kamich added that OKE's trend-following Moving Average Convergence Divergence oscillator (MACD) crossed to a "liquidate longs or take profits" sell signal in mid-December. Click here to read his full analysis.