Briefing.com on Oil Svc sector. Also, MVK made a strong move today on almost double volume. One of my largest holdings. We'll see if it can hold.
Story Stocks®
Updated: 09-Apr-01
15:50 ET Oil Services Index (OSX): 116.17 +3.12: Oil services sector extended its modest recovery rally amid expectations that energy prices will rise sharply again this summer as demand picks up... Group also benefitting from some rotation ahead of earnings season... Oil services is one group which should have no trouble meeting its numbers in the days and weeks ahead... Consequently, those investors looking to ride out the silly season with little risk of a blow-up are moving money into the oil patch... While the move makes sense over the short-term, as earnings growth should be sensational, Briefing.com thinks it's too early to suggest that the group is ready for another upturn... First of all, the global economic outlook looks dim... As such the normal season uptick in demand might not be as great as many now expect... Second, the group's valuations remain on the high side as much of the good news was built into the stock prices earlier in the year, and even though many of the stocks are well off their highs, multiples are still historically high... Third, the OSX index has yet to take out any serious resistance levels... First resistance is in the 120-121 area (50-day moving average), with a secondary ceiling at 125... Briefing.com would need to see the second barrier fall before getting excited about the current rebound... While we agree that oil stocks are a good place to hide over the next few weeks, there is little to suggest that the group can sustain an advance beyond that period -- unless of course, crude spikes back above $33 bbl in which case we would have to rethink our position... Stocks in the group which are up today include Noble Drilling (NE 46.06 +1.12), Global Marine (GLM 26.07 +0.91), Transocean (RIG 47.08 +1.60), Schlumberger (SLB 60.25 +2.30), Halliburton (HAL 35.46 +1.28), Smith Intl (SII 72.79 +1.64), and Tidewater (TDW 43.70 +1.16).- Robert Walberg, Briefing.com |
