Thursday, April 3, 2008

Bookkeeping: Oil Services Finally Picking up - Adding to National Oilwell Varco (NOV)

As I've been saying, a lot of charts are looking good for the first time in a long time. Oil Services has stunk for a while despite the record high crude prices - an interesting divergence. I've been adding exposure to old favorite Core Laboratories (CLB) slowly the past few days, and today one stock that has completely befuddled me by it's weakness is finally showing signs of a "turn": National Oilwell Varco (NOV). The valuation in this name is beyond ridiculuos. On this breakout over and above BOTH its 50 and 200 day moving averages (in 1 fell swoop) I am beginning to rebuild NOV, taking it from 0.4% of fund to 1.4%. If we break $130 on Core Laboratories I'll be adding there as well. (all you chart readers will see plainly obviously why) For NOV we want to see a break above $67.50 or so to confirm this move is true.

Previously held oil service names like Cameron International (CAM), Smith International (SII) also are ramping - we seem to have a rotation here. Since I don't want to add any more names to my already bulging portfolio I'm simply adding exposure through the 2 names I already own in the 'sector'. It's been a long time since this group acted healthy.

Somehow I still feel ilke this is April Fools and all this buying will blow up at 8:30 AM tomorrow morning but have to respect the strength in these charts... so I'll have mental stops placed on all these recent purchases and if stocks start to break down I'll go back to defensive mode very quickly.

Long Core Laboratories, National Oilwell Varco in fund; no personal positions

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