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Reliable Signal Indicates Kinder Morgan Gains Not Sustainable: Carter Worth

A concerning pattern has formed in a leading MLP that many investors expect to post significant gains.

The stock in question is Kinder Morgan – and according to Oppenheimer’s chief market technician Carter Worth a long position is the wrong position.

We know, that view is in direct opposition to something that top energy trader Mark Fisher told us just a few weeks back.

On January 3rd he called Kinder Morgan his favorite name in the entire energy complex. "The pipes that carry nat gas and oil are the way to play it," he said at the time.

But if Worth’s analysis plays out – Fisher is in for a rude awakening. And Worth is pretty sure he’s right.

“With Kinder Morgan climbing from $65 to $90 it’s now trading at 2 standard deviations above its 150-day moving average,” he says.

“That has only happened 6 or 8 times in the last decade and every time it’s happened – you’re better off selling.”

Gains are not sustainable.

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Trader disclosure: On Jan 26, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova is long XOM; Terranova is long TRLG; Terranova is long CNX; Terranova is long SBUX; Terranova is long SNDK; Terranova is long CSCO; Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long EMC; Terranova is long AXP; Terranova is long F; Terranova is long JOY; Terranova is long MCD; Terranova is long OXY; Terranova is long MCD; Terranova is long OXY; Terranova is long IBM; Terranova is long SU; Terranova is long MA; Seymour is long F; Seymour is long AAPL; Seymour is long BAC; Seymour is long CIB; Najarian is long AKS; Najarian is long BAC; Najarian is long PNC; Najarian is long WFC; Najarian is long GDX; Najarian is long NFLX; Najarian is long MSFTl Najarian is long IBM; Finerman is long (JPM); Finerman is long (BAC); Finerman is long (PLCM); Finerman is long (IBM)

For Ron Insana
No Dislcosures

For Mike Khouw
No Disclosures, all holdings in separately managed accounts

For Karen Finerman
Finerman’s fund is long (AAPL)
Finerman’s fund is long (JPM)
Finerman’s fund is long (PLCM)
Finerman’s fund is short (SPY)
Finerman’s fund is short (MDY)

For Marc Riddick
No Disclosures

For Carter Worth
No Disclosures

For David Barger
No disclosures

For Richard Repetto
Sandler O'Neill expects to receive or intends to seek compensation from E*TRADE Financial Corporation for investment banking services in the next three months. As of the date of this report, Sandler O'Neill currently acts as a market maker in the securities of E*TRADE Financial Corporation. E*TRADE Financial Corporation is a client of and receives non-investment banking securities-related services from Sandler O'Neill (based on information as of the end of the month immediately preceding the date of this report). An affiliate of Sandler O'Neill has received compensation from E*TRADE Financial Corporation for providing products or services other than investment banking services in the 12-month period ending as of the last calendar quarter.

CNBC.com with wires.

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