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Non-Tech : Invest / LTD
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To: tdl4138 who wrote (7728)3/11/1999 8:18:00 PM
From: Thean  Read Replies (1) of 14427
 
Dave and Steve,
I agree that this is not a headfake, just profit taking. A headfake would mean this rally has run its course and is heading back down to its recent low in 3 weeks. While it is possible if oil retraces back to $11 in the event of no OPEC cut, but that is too far fetch right now, at least not until more transparency from the oil ministers surfaces.

Afterall oil price falls today. There is no reason why the drillers should not fall slightly accordingly. A better question is if this oil price rally has peaked. There is another $1 1/2 possible for oil to appreciate in the event of very positive OPEC news, like 2 million barrel a day cut. What priced in is 1 - 1 1/2 million barrel cut. Therefore, a broadbase selloff from this point while the actual OPEC numbers have yet to be fixed is asking too much. I would not short here. A better time for shorts is after the OPEC announcement, after people looking for other things to focus on.

While I think CAM may bang head at $30 if no further fresh OPEC news come out next week, a selloff to $25 is unlikely. In short, we are merely in the churning period after a very sharp runup. There are more greed money about to step in so this thing is not over yet.

I sold NE at the high and bought FGI near the low today. Picked up VRC as well. Still holding CAM and RIG. Strictly trading on the long side from here.
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