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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Roebear who wrote (54973)	11/18/1999 6:54:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

It's all for sale except a select few here... Crude down a bit after hours on the Strategic Reserve Sales push... the spin doctors will be out - hot & heavy. Not that we collapse from a strong selloff here; but profit takers will be ringing the register here. The consistant energy players who bought and hold stocks from the OSX 50 & 60 & sub 70 levels have strong profits here; this push is more from the mo-mo crowd returning than it is from the established energy players; who did their buying here - sub OSX 70 and established our bottoms on this recent volatility. There are simply too many - with too much profit; too close to year end; not to see heavy profit taking soon. I've been banging the drum for months that Crude will hit $30 and the reason is simple, supply & demand metrics and the trend to sub 300 M BOE in domestic storage. But; I think we get a profit taking pullback here in both crude & the OSX here, or very soon. We need a strong, undeniable trend with accepted momenteum that is undeniably established. If the API's showed a 4-5 M boe build next week; what would happen to crude prices, or the OSX ? We simply need 2,3 weeks in a row of 2,3 M BOE drawdowns each week and a strong penetration of that psychological barrier of 300M boe in domestic shortage to push crude "firmly" through $30. I think OPEC is dancing the dance with the future traders here... The ONLY way they can increase production is to bring the world to its collective knee's via $30+ crude and then - they will get the Global outcry of "uncle" and a cry from anti-inflationists to ease production. Those are the only circumstances in which OPEC can ease; and not get killed by the futures traders. OPEC will come out as the good guy, easing production in a quote - unquote, effort to ease the inflationary pressure of spiking crude prices in an "effort to STABLIZE" prices; which they will say is of course their only intent... "the stabilization of prices". This will reinforce their desire for a "price band" program and will allow them to increase production within this "price band" system which is the only way that traders do not take crude down as speculatively as they took it up. Remember, there is substantial "real" desire to increase production by many OPEC members. I think these crude rallies when accompanied by proportionate OSX rallies are times to sell into strength - they have to be; given the lack of cooresponding rising fundamentals of new orders,backlogs, or pricing in the service stocks; and rig counts and dayrates in the drillers. Untill the fundamentals are in sych with these price moves - sell into the strength; the time to buy & hold and hang on for the ride is not quite here yet imho. Sell the euphoria/trumpets - buy the gloom & doom/cannons. Nothing has changed... Take some profits here ! - don't take entire positions of the table; but sell all of your margin holdings, or sell 1/3, or 1/2 of positions into these runs. There are simply too many solid rotation opportunities, too many continual individual oversold stocks to buy and too much continued volatility no to get another re-entry opp. E&P's however: I would not necessarily be selling, or even trimming in most cases; as "they" - DO have rising and strongly positively trending bottomline fundamentals. There are individual stories within the service/driller sector who are exceptions - OII with their news may be one not to trim, but to add on any pullback. Use common sense... Sell the driller/service high flyers here and rotate into the laggard values in E&P land, or the few remaining values in the service/driller sector. E&P's are the place to hold & hang on for the ride; as they are putting these higher commodity prices into the cash register every day; unlike the service/driller sector who have to wait for the major Oils & E&P's to spend this increased revenue at a later date... a "no-brainer" and one hell of a "hedge" here imho... My .02 cents - fwiw