Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: ron peterson who wrote (47269)	7/2/1999 11:32:00 AM
From: SliderOnTheBlack	Read Replies (3) of 95453

Geiche; shame on me - sold OSX laggards - bought OMNI & CRK ....OMNI up 60%+ in days; CRK up 14% ...... (VBG). allways like OMNI as a trading laggard' quite simply - OMNI is the ''Transition zone'' ie: shallow water non-drilling play. The do the seismic prep work if you will... nat gas drilling & the jack up market can not go up without OMNI sooner or later, backing & filling... it did. CRK is still my play through XMAS. For buy & holders - this is solid ground; all the fundamentals for oil prices are fine. But, the overall market is staging another Bull Run to perhaps 12,000 imho and this tech & overall mkt rally is pulling $ from a ''short term'' rotation into the Oilpatch. Because of this mkt rally - the Oilpatch just will NOT see a large infusion of cash untill the following: 1. sub 320 M boe in US storage 2. 135+ and really need Carl Palmer's magic # of 150 GOM rigs at work ...regardless of Crude prices (barring a $20+ quick breakout) we will trade a moderate range, untill the cap ex spending, rig counts and storage fundamentals change - no chance for more than a 10-15% up/down trading range untill these fundamentals change imho. If you want to play the OSX - now it is a stockpicking game. The small cap laggards like OMNI are the plays; and the sm/mid cap E&P's who are not overvalued and have ''stories'' or factors that support their upside; ie: CRK MEXP PGEI and I still like HSE UPR XTO as well... there are other small/micro caps like MHR & VEI as well for the risk oriented... Love the OSX longterm - but we are in a deadzone untill fundamentals change - CNBC talked about a battle between the Oil companies/refiners and the pit traders today. There is a huge group willing to short Oil on any breakout, or any weakness - this + the negative earnings #'s coming does not spell doom, but it also can not and will NOT support a breakout rally for the OSX. IMHO; the breakout comes about OCT off of the Q3 releases and what will probably then be much better actual improving fundamentals.... it is an E&P & a stockpicking game untill then. At that time (135+ to 150 GOM rigs, sub 320-25 boe in storage) then it's a turn on the juice, buy on margin OSX run through perhaps 120ish by April/May imho.... ...just my .02Cents.... 2-3 months of not more than a 15% trading band imho and a short selling led, shakeout will occur before any rally does.... buy that one - the one Bull referred to; it may not happen here, but it will - now through Sept...imho. good luck

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