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Play of the Day (For Thursday)
Interactive Chart
Wednesday, March 07, 2001

WFT - Weatherford International $58.25 +1.45 (+4.25)

Tuesday's Comment:

Weatherford International is a leading provider of oil and natural gas drilling and production equipment and related services. WFT has gained over 78% after hitting a relative low of $31.75 on November 30th. The stock hit its all-time high on Tuesday, and we believe that it could be ready to move even higher. The oil drilling equipment sector currently has strong momentum and WFT should continue to move with the rest of the group. We are also looking for a split announcement with the April earnings release or out of its next BoD meeting. The company has enough shares for a split, with 250 million shares authorized and 110 million shares outstanding, and the stock is currently trading at historic split-levels. The company's last split was a 3:2 when the stock was trading in the $45-$50 range. Going forward, WFT has support at Tuesday's intra-day low of $55.50 with stronger support at $54.15, the 5-dma. There is light resistance at Tuesday's intra-day high of $57.20. A move above $57.20 could send the stock up to $58 or $60. Traders should be looking for a bounce off of $55.50 or a breakout above $57.20 on midday volume of at least 750,000 shares before opening new positions. We plan to place stops at $52 to limit potential losses.

Wednesday's Update:

Weatherford and the rest of the energy sector were beneficiaries of renewed investor enthusiasm for the group today, sparked by a hostile takeover bid from Royal Dutch Shell (NYSE:RD) to acquire Barrett Resources (NYSE:BRR). Even though our play resides within the Oil Services sector, investors bid up shares industry wide on hopes that this potential deal would be a catalyst for further consolidation. In fact, the Oil Services Index (OSX.X) broke through key resistance at 135, having bumped up 4.23 to 137.39 on the day. This puts the OSX.X just 4.95 away from its all-time closing high. This is obviously a sector that is experiencing some good buying momentum. As for our play, WFT notched a new 52- week high on good volume of 2.3 million shares traded. This is 65% above the three-month average trading volume of 1.4 million shares and tells us that buyers are still hopping aboard. In addition, the MACD just turned positive and OBV is at new highs. Near term resistance may present itself at $60. We note support for WFT at the top of its recent base at $55 and also slightly lower at $52. Additional entry points might present themselves on a bounce off of today's low of $56.71 or additionally, a bounce off of support at $55 on good volume that would put the stock on pace to finish with 1.5 million shares traded for the day. We have set our stops at $52.00 to protect against a reversal.

Picked on March 6th @ $56.80
Change since picked +1.45
Stop Loss @ $52.00 

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