I bought a little yesterday, but I think there is a good chance we'll see 35. NE isn't doing that well in a straight up market, so what's going to happen if we get even a 3% market selloff? We've all seen those periods where the market goes down 1% on a given day, and NE is down double or triple that percentage. And then when it gets cheap enough it becomes a defensive stock and holds a certain level even with the market headed south because what's the world going to do? ....stop drilling for oil?
Here's the scenario I'm going to try to avoid because I've done it too many times: Keep adding more and more as NE goes down and find myself owning more than I want to and holding a substantial loss into summer, and having to wait months to see how it all turns out. It usually turns out fine, and it has a summer rally or two, but why not be fussy and let it come to you. Sure you might miss it, but I'd rather deal with that then the stress of a substantial loss lasting months that I'm hoping I'll get bailed out of. Still, I'll buy some at 35.
I expect a down move to start the week, current futures showing oil at 89 and change. I do not expect NE to break 35 this week, but we'll move that way pretty surely.
I know, a one-day move in oil futures should not matter in a world where the likes of NE drill multi-year programs and have multibillion dollar backlogs,,,,, but it will matter. When oil dips, oil service dives.