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

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To: ItsAllCyclical who wrote (49970)	8/27/1999 1:27:00 PM
From: SliderOnTheBlack	Read Replies (3) of 95453

RRC short squeeze potential... Jim; while the short interest did not just arrive on the JV news; it increased into virtually no buying volume... sinking the shareprice. The short interests history is what is the single most intriguing factor about the trading potential here. Much of the short selling is hedging. Look at when RRC strongly bought back stock last fall - the short interest strongly declined from September to late December - but so did their stock price... the unlocking of the hedging shorts AND their stock buy back could not stop the sector free fall entirely last fall. Most importantly; look at the relationship to the shorting to RRC's stock price behavior. The Stock ran from $2 to $5 in March to May - then the short interest re-accelerated (hedging their gains) and the stock went into freefall in May from the mid $5's to high $3's virtually overnight. The stock then ran from $4 to $7 in late May to June - the short selling re-accelerated once again on the $7 peak- the stock once again, freefalling to the mid $5's from $7. Now look to where the stock had a little bounce in late July-1st of August; but then short selling increased once again - and on our weak volume; this has fallen to sub $5. Also, notice that very recently on the Big Charts graph; short sellers covered a bit sub $5. These are primarilly 'hedging' shorts - they are by nature - 'weak handed' as also shown by the volatility of the shareprice in relation to their covering... Yesterday we had a big intraday % swing in the stock - primarially short covering oriented - as we had a good volume intra-day reversal. These shorts will 'flow' with ANY buying interest as they are HEDGING -shorts in nature. This is a gift horse - short squeeze buying opportunity leading into the Sept. closing announcement of the JV. RRC has about 9 million insider owned shares vs. a float of 27.6 million shares - 1:3 ratio. 10% of the float is presently shorted - over 19 days to cover - with the JV being a 'LOCK' to close on schedule in September (with in 30 days). Look at the prior movement in the stockprice in relationship to news events - shareprice movement in relationship to their 'hedged' events.... we have 30 days untill the JV is finalized; and 19+ days of short covering and these being hedging shorts - virtually acquiesce on ANY buying pressure - a traders dream come true ! CEO has put his ass on the line - GUARANTEEING that the corner has been turned cfps -wise for Q3. Deutsche Banks (ultra conservative Oilpatch analysts) - raise price target to $10 here - and are pounding the table. Per my earlier post - there is no close 2nd choice as far as this being a fundamental STRONG BUY .... add the Short- Squeeze play here - and this is a 30 day (untill the JV closing) 40% potential play ($4 3/4's - $6 3/4's). This stock was moved to $7 on just the JV news. We will be over 1/2 way through Q3 when the JV is announced. We only need to retrace here - nothing else. This has a history & pattern of the relationship to the shorting & price movements. This is poised for a $5 to $8 run shortly imho... to $6 3/4ish on the short covering alone - on the JV finalization & then to $8 on Q3 numbers. Once again: Get the Deutsche report from Multex: multex.multexinvestor.com 1.5 x 2000 cfps 63% of NAV PE of 5 x 2000 est earnings 5 x Enterprise Value/2000 E EBITD multiple sector leading 13 year avg reserve life *** over 48% upside in merely returning to its recent high and 19 days to cover short interest @ 10% of the float - being hedging oriented in nature. .... just do it Rarely; do we find a stock with this type of trading potential; that has this 'type' of acquiescence hedging/short interest' - virtually able to be 'pushed' in any direction desired by Traders; and also having a stock with the technicals supporting a 40%+ short term trading opp and also so fundamentally value supported; and at the crux of the sectors underlying commodity going into its sweet spot of the winter heating season - with this traditional end of summer driving season lull - adding to the temporary weakness.... never have so many trading opps simultaneously converged on a single stock here in the Oilpatch since I have been following.... 48% .... nothing to sneeze at short term. It will happen - I personally guarantee it (VBG) - see you all at $7+...

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