NOV has a trendline from way back that shows support around $47-$50, the other thing is that bulls were defending the 12-month moving average yesterday into the month-end, or the MM kept it down to let a bunch of players in at support...it gapped lower at the open but it pretty much moved only slightly downward, which tells me that someone was loading up big, especially the last hour, notice how it's slowing moving up from the low the last hour yesterday...mmm...
according to william o'neil (who has been mentioned here), in a market top (i.e., july/october 2007 double top for the broad market indexes) not all sectors top out at the same time (i.e., housing in 2005, REITs 2/2007, retail and financials summer 2007, industrials and tech, 10/2007), so yes, i'd say that energy sector has topped out, but personally i'm not all that bearish on energy yet (i don't think global oil issues are going away anytime soon) as i am with retail still, and my understanding is that tops take time to form and i am nervous about several of my long term holdings, CVX is pushing the envelope here
so i wouldn't expect easy days ahead for the sector and get out your ruler and look at weekly or monthly charts to find longer term support trendlines for energy stocks or indexes, if they break then yes that's trouble indeed, the other thing to do is use fibonacci retracement to see how far back some stocks may retrace
strange days for NOV yesterday and today...
there are plenty of traders who are quite good at timing tops and bottoms, and better to make a lot of money and pay taxes than to make no money and pay no taxes
fundamentals are important for screening stocks but when it comes to entering or exiting, technicals matter most
markets price in fundamentals in advance, which explains why housing topped in 2005 when the last leg of the bull rally was about to get going and why they are trying to bottom now when current real estate news is nothing but dreary, the banks topped in early 2007 and got pummeled late last year, the markets act as a leading economic indicator of sorts
I understand IBD's momentum philosophy that you should only buy on the way up. But after listening to Cramer, he has the opposite philosophy for a longer term investor, to buy a stock you love because of the fundamentals and growth outlook (like NOV)that might be currently out of favor with the big boys, on the way down to lower your average cost. Maybe this is a good time to adopt this strategy because I assume NOV will wind up at say $100/share in the future and you'll make more money this way.
This reminds me of what happened to me last year. I bought FTO @31.46 the first week of December 2006. Not two weeks later a couple big firms announced that the energy sector was way over sold and oil was going to pull back and I watched in amazement as FTO sank down along with every thing else oil related. I did not believe them and held my shares all the way down to 26.10 and couldn't take anymore pain. That drop took five weeks. As it turned out 25.59 was the bottom and from January 10 to July 10 it ran straight up to 49.00! Needless to say I'm alot older this year after that fiasco but I've learned a thing or two.
I love NOV and have been fortunate to make some good trades but this month I got clipped again. I sold into the Fed rally at 65.00 for a little loss ( 66.36 average price) but I'm looking to load up again. It looks to me that this market will take it down again and I will start buying under 55.00 and I feel very confident that NOV will reward handsomely. Lets beat the Street!
Why is NOV down 5%? Because the market is STUPID! When someone hands you a big, fat gift, the smart think to do is take it. Energy service stocks will have their day, and soon, I believe. Historically, energy consumption does not decline during recessions. The price of oil and the share prices of NOV, WFT, NE, RIG, etc., etc., will be much, much higher 12 months from today.
I agree! Load up at these bargain prices. NOV is about at 1/2 of it's value with excellent growth prospects. But I don't understand what the price of oil has to do with oil service stocks. You'd think they'd make their money regardless of the fluctuating price of crude.