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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NucTrader who wrote (36120)	12/29/1999 9:45:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99985

Consensus expectations on the Street have crude AVERAGING about $20 next year -- far below current levels. That is why the oil service stocks -- despite strong gains -- have greatly underperformed crude of late. Oil service performance has also been hurt by the reluctance of big oil so far to hike capex very much. The OSX (oil service index) has risen about 15% the last few weeks, but still is 10% below its 1999 peak and about 40% below its 1997 peak. I am holding now but would be a seller if OSX made another run at its 1999 peak of 91 (now 83). But sharp dips into the 70s should be bought. A strong and sutained upmove should begin once people conclude that crude will stay north of $20 on a long-term basis. And OSX underperformance versus crude has been so great, that the downside risk from current levels is quite limited. I plan to load the truck when crude takes its inevitable hit. If crude does in fact average $20-22 next year as I expect, the OSX should regain its 1987 peak of 140 before the Presdidential election.