BigBull;...you are right about us seeing ''THE" buying opp soon...
My nose is twitching again.... I have dumped all service companies other than PGO/VTS - only holding 2 drillers, opposites of the spectrum - RIG best value, FLC most upside leverage. I am taking profits - sold RRC today, sold AOL a trader from the selloff and some other OSX stocks. I am raising cash to make a more leveraged plunge than anytime of late. I will buy some options off of any substantial selloff here. Especially some E&P's and I like DO options on an OSX selloff - maybe the index itself.
I sold all HLX,FGI, GIFI, and even took profits on RRC at $7 - a nice run from mid $3's.... $7 was the target for too many Institutions - still room to run, but I see profit taking off this move here - I got a near double in the bank.
I think we are going to see one last big shakeout attempt - hedge funds, traders etc. will ''gun the stops'' - one big tip off was John Bollinger on CNBC who talked about shorting Oil here and expected a sell off in OSX stocks... what Bollinger is telling me (*being a Technical Analyst - with a very well connected ear to the street) is that he is not only ''hearing'' this , but the technicals are telling him it is starting and will happen. It doesn't matter if it should happen - it will if the Street ''wants'' it to happen and they ''want'' it to happen... watch the direction of Big Blocks... we are seeing some 100K sells here and there...
Any buy & holders - just sit pat; but for traders, dumping the soft stocks here - including the ones that will be the short selling targets, and/or profit taking targets; may be good trading. I am raising cash here.
As the Bull said; "THIS" selloff may just be THE one to load thy boat, thy neighbors boat and any boat thy may be able to get thy little greedy fingers on...
My fav's --- are based on 2 areas. One - leverage - the Drillers will get the juice first... service/mfg last. I want my $ into DO, RIG, SDC and maybe some other Jack Up oriented companies that still have deepwater presence - NE, MRL etc. on any selloff. I really like DO calls if it sells off $2-3 here. I will make my first large option move if it does, or if we see a low 60's OSX.
While FGI, GIFI, UFAB, VRC etc. are the values - they are more longterm plays and I think that the drillers and the ''new'' mo mo fav's - BJS SII and then CAM & WFT and the drillers will be the big movers. I am not so high on the land drillers like NBR, UTI & PTEN - I think they are allready fully, if not overvalued here. ESV & RDC also, don't look as attractive as SDC, DO & RIG. But, the OSX is not the ''real'' play....
The E&P's will really separate themselves from the OSX here in that they WILL show nice year -over year increases in the next few quarters and I am not sure how many OSX stocks actually are going to be able to do this ? The Nat Gas plays, really have some upside come Oct-Nov. if this "Gas Shortage'' that we all see as strongly possible comes to fruition... CRK is THE play imho; they are just like RRC who has doubled directly into the face of this OSX selloff. The reason CRK has fallen, is they are hedged at lower than present market prices untill Sept, or OCT. They are not obviously producing all they can here, since they have this hedge at lower than market prices into effect. They will open the spiggots and will also step up cap ex spending, also they will obviously show a dramatic cash flow increase when they are ''off'' these collared/hedges and start receiving market prices - if we see a run through $2.65 - $3.00 nat gas - let alone the upside of a shortage driven move - CRK is a $7+ stock all day long virtually OVERNIGHT... a double just sitting for the taking -this is my #1 risk vs. reward choice - and $10-12 is not unrealistic by late Jan. if we get the Gas Shortage panic move... I also like HSE, UPR, XTO and love OEI here... and there is a little stock called MEXP - what does Phill Knight say ? - just have ''some'' MEXP and write yourself a note to check on it in 2-3 years...$7 by next spring is a gimmie imho - can you wait 9 mos. for a triple ?
60-70% E&P's vs. 30-40% OSX is my personal weighting fwiw...
Sleepers - I like OMNI near $3 for a gimmie to $5 and if FGI goes to $10 , or under - with that short interest and what looks like a 2 year Oilpatch Bull Run forming.... with Holloway retiring in 2 years... FGI is a longterm buy there. - this is a tough play - too many people with too many angles on this one...but FGI at sub $10 ? too good to not load up on...
.... an SI Rig party should be appropriate about next March, so us Snowbirds can have a reason to go somewhere warm & celebrate our $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ from the Oilpatch Wars of 1998-2000... so, lets start picking out a site for the Party. If we don't go to an actuall offshore Oilpatch site, as part of the festivities - I vote for a 2 day Las Vegas Bash.. cheap airfares, and the correct atmosphere (VBG)....
Lets get Reeeeeeeeeeeeeeeeeeeaaaaaady to Rummmmmmmmmmmmmmmmmmmmmmmble !
"This'' is the one to buy - bank on it - anything near OSX 60-3 - beg, borrow, or steal - but load thy boat.
... could be now, or it may take the 2nd quarter earnings reporting to be the catalyst, but now through August makes sense for a blow off that the Street will use as a shakeout... buy it and buy it large.
good luck all. |
