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: BigBull who wrote (89737)	4/5/2001 11:34:46 AM
From: SliderOnTheBlack	Read Replies (1) of 95453

Bullsky: "Ok oil and OSX rallying here. Not totally unexpected. IMO the moves are: Oil to high twenties to thirty. OSX 120 - 125. If both fail there, then IMO this oil bull is over. " Agreed & that's why I went overweight to "calls" here & mainly in the offshore drillers. I want to define & limit my downside; but maximize the leverage to the cash I deploy; while still being able to keep a minimum of 20-25% cash on hand for future gold/silver additions; tech abyss bone picking and/or adding Oil laggards into strength. I have no grande illusions of "10 Ft Tall & Bulletproof" - simply because once storage levels crossed 300 M boe; that is the EXODUS trigger for a large percentage of non-speciality Institutional managers. That 300 M boe is the early indicator trigger for a strong potential pullback in crude prices - as all we need is for the economy/demand to continue to slow quicker than OPEC can cut production & we could be looking at $18 to $22 crude quicker than anyone may believe. Gas-wise; I think we also could be looking at $3.50-$3.85 Gas sooner than anyone thinks - but, the bottomline is that the E&P's sweetspot in the cycle is gone - wave bye,bye... no one - I repeat; NO ONE; is going to take the E&P stocks to new highs into the face of a lower combined price deck for Oil & Gas and lower 2002 eps & cfps numbers - it aint happening... tradeable bounces off the pullbacks ? - yes; but thats immaterial to 95% of threadsters on SI - as they never sold the pop in late Dec - so they are not in any position to buy the dip & trade it. The later cycle offshore drillers & select service Co's are better bets at this point in the cycle anyway - PDE is my fav - most analysts have $3.00+ eps numbers for 2002; PDE has the greatest % increase in eps for 2002 over 2001 and the lowest forward PE valuation. ATW is a great laggard play here because they chose to refurb & upgrade a couple of rigs here - which impacted nearterm numbers; but set them up for a strong 2002. RIG as well, similar to PDE is a great late cycle play with accelerated eps/cfps going into 2002 - RIG & PDE were my two largest buys here of late for a trade... I'll trade purely on the technicals from here on out - as if crude stays over 300 M Boe here - the Street may exit & disconnect even the late cycle plays from the fundamentals on a moments notice - as they allways have in all prior cycles. I think we've got a tradeable window of opportunity here for the OSX stocks - between Q1 & Q2 tech reporting & the probable coming additional Fed Cut. But; let tech co's in Q2 - miss again & lower guidance, or worse yet - be unable to offer ANY guidance & look out for the final washout crescendo in the NAZ - which will take DOW, S&P and Oilpatch stocks down as well. I'm hoping that we get an April to August window for the OSX to rally one last time to new highs & then I look for the "NET SHORT" reversal to make what is the next "Big & Easy Money" trade in the oils & that's LT net short... It would be nice to be able to jump off OSX 165ish in August/turning short and catching an end of summer NAZ abyss of about 1250-1350ish that I still think is coming. Agree on the US Dollar - it's a gimmie imo & it mades the patient accumulation of gold stocks from XAU 40-48 a very prudent LT buy imo. One last OSX rally - just one more for the Gipper, one more - that's all I ask (VBG)

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