I checked out Tom's "Black Gold" piece on the site and it's a must read for those interested in the "oil patch". I did some p&f work on Cliff's Drilling (CDG) for the stock's message board on the Motley Fool and I repost here for this who might be interested:
I wrote a rather pessimistic post on this board on 3/17 and I concluded the post with the following:
>>> Sorry to be so pessimistic but the chance for a sustained long term upmove in the stock is quite a few months down the road.<<<
Since that post a "trader" would've been able to garner a handsome 57% profit if he/she bought that day. Since I had already averaged up in the stock I had a full commitment to Cliff's, and as I described in that post, I decided to stick with the stock though I knew I would have to lengthen my investment time horizon. Well, as the p&f chart looks right now, the stock may be getting ready for it's "sustained long term upmove".
- Last week CDG moved to an up column on it's bullish Relative Strength (RS) chart. The stock remained on a buy signal on it's RS chart throughout the drubbing in the stock price and that was the main reason I stuck with the stock (along with my belief in the sector as a whole). The RS trend was down, but it did not give an RS sell like many of the other stocks in the sector (TDW, ESV, MDCO). RS signals last on average 2-2 1/2 years and it
indicates the stock has outperformed the Dow and should continue to do so. {Another position of mine, FGII, just gave a RS buy this week for those interested}
- CDG gave a "Triple Top" buy signal at $45 and we're still on that buy signal with an upside price objective of $79. "Triple Top" buy signals are profitable 88% of the time with an average gain of 29% over a 7 month time frame.
- CDG has to get to $54 to complete a "Bullish Catapult" formation. It's an important confirming pattern off the triple top that further indicates decreasing supply, and increasing demand for the stock.
- Most importantly, CDG is bumping up against it's "Bearish Resistance Line" from it's November $82 high. This important downtrend line has remained unbroken to the upside since then. A breaking of this absolute major downtrend line would indicate a change in the long term trend in the stock. P&F buy signals that are given below the bearish resistance line are best taken by traders, and a breaking of this resistance line would bring in more
bullish, longer term investors back on board.
The supply/demand picture of Cliff's seems to be moving quite rapidly to the bullish side. Take heart long term holders!
Bruce |
