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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: HH who wrote (13800)3/5/1998 4:57:00 PM
From: Thean  Read Replies (1) of 95453
 
Heyward, tell you what - we will live to see another exciting day tomorrow. If you still want to get into GLM, you may want to get in after GLM hit and close above $26. $26 is really a key resistence, no matter how you look at it.

The deepwater and service company rally going on right now is driven primarily by merger, link-up speculation. Those companies which track closer (in timing) to the commodity price like the land drillers do not participate much. My current enthusiasm for the offshore drillers are limited to certain time only. After the leasesales, things could unwind if the sales go as expected, especially if oil continues to weaken or stay flat here (very likely for the next 3 months).

In a broader scope, the upside of the drillers will be capped until oils move back up to $17-18. There is no way around this unless natural gas goes to $3 then those drillers with natural gas exposure will benefit tremendously, e.g. UTI, CDG to name a few. If you want to trade this, you can make money. If you want to buy and hold for 3 months, I'm not sure if you'll make money. Six months, the chance is better. Or you can buy MTEL or some other stocks outside of this sector. If you want to me to give you two favorites outside of the drillers, let me know and I'll sent you private mail (I don't want to tout them anymore).
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