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: ronayre who wrote (77629)	10/31/2000 12:12:18 PM
From: ItsAllCyclical	Read Replies (2) of 95453

LSS predicting the patch? I don't buy it. (At least not yet). First many OSX issues are below or near their 200 dma so LSS or MVK aren't unique. Second the issue that plagued NSS (and which hurt the tubes) is the level of imported tubes. This was caused by a strong dollar and low levels international drilling. The dollar will most likely weaken during the next 1-6 months and international drilling is continuing to pick up. Third, according to both NSS and MVK some purchases were delayed for tax reasons. By keeping a low inventory or their books taxes are reduced. Purchases should pick up come Jan 1st. Fourth, NG drilling was greatly reduced in Canada this past quarter due to wet conditions. As we all know winter is usually very strong for drilling in Canada. Fifth, the tube plays benefit from BOTH NG and oil drilling. So far NG drilling is near records but oil drilling is still very low. My guess is that as NG production starts to show improvements people will switch to oil drilling. Sixth, we haven't hit winter yet, we had extreme market weakness and tax selling is almost over. Let's wait till Dec and see where we are. If we are still around OSX 115 then I'll say they might be more right than wrong, but at these levels many mid/small cap patch stocks are great buys. That said we can still see capitulation from these already low levels. Even though the mid/small caps have been pummeled unfortunately SLB, HAL, SII etc are still relatively expensive. I still think we rally at least once more back to 140 regardless with new highs on the OSX very possible. In that environemnt even if only 135-140 is seen I think MVK will rally back to 25+ making it a 60%+ gainer from here.

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