Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of oil producer Halcon Resources Corp (HK) fell as much as 10% today as oil prices plunged once again.
So what: The price of WTI crude oil fell as much as 2.6% today to a low of $47.59 per barrel on speculation that a diplomatic deal could be reached with Iran, which would reduce sanctions on the country. If sanctions are lifted, Iran's oil could flow to the open market and potentially put further pressure on an oversupplied market. In reality, Iran has been finding buyers, like China, for its oil, so the impact probably wouldn't be dramatic for oil markets.
Now what: Halcon Resources is on a roller-coaster ride that's driven by the whims of the oil market, and that's why its stock has reacted so violently. The biggest problem is that it was barely profitable before oil started to fall, and now it's expected to lose money in 2015 and 2016. Given the struggles in the oil market, I wouldn't jump into this stock long-term until oil prices improve, and that may be a ways into the future.
