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Non-Tech : Invest / LTD
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To: Peter V who wrote (7704)3/10/1999 5:35:00 PM
From: Thean  Read Replies (2) of 14427
 
RIG's TA

First look at the weekly chart:

iqc.com

Notice that in the 12th week of 1998, RIG (and other drillers) all gapped up and traded up from there until they peaked 6 weeks later. That gap up was the result of a $1 1/2 move in crude price in a single day when OPEC came out and announced they wanted to cut their production. The circumstances that led up to that point was almost identical to what we have here. Today we have 80+ cent move in crude. So the party is not over yet.

Also notice that the down trendline will be broken by the close of this week if RIG closes above $23. All these are very positive.

Today we saw panic buying. Haven't seen this for a while now so it's better to let the profit grow and not take the profit too soon. The situation today is quite refreshing - almost unlimited buy order stepping up at the bid each time the stocks (all drillers) drop slightly. The big institutions are stepping up to buy for a change, fearing they may miss out. Therefore, I expect more to come in the next few days. A strong day like today will very unlikely be the top for the present cycle. Almost all drillers close at their high today and we are talking about an average 15% gain here so this is very substantial. A gap up tomorrow is expected but we may see more profit taking tomorrow. While I'm sure this will reach a top when the buy mania dies down and people refocus on other issues after the post-OPEC reality sets in, we are not there yet.

Pete, to be conservative, I would still average up in selling into strength.
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