Oil - My Prediction

With oil currently at a 19 month low, it's sitting on a major mental milestone: $50. Will OPEC allow this price to keep droping? Many pundits say no. They say that oil will average $70 / barrell in 2007. Technically speaking, all the graphs for the oil service companies, oil drillers, inf. companies and the comodity itself are all very oversold. There's so too much of it out in the open and it's cheap and willing and ready for you to scoop it up now before the price goes right back to where we all know and love it. Check out the graph below for HAL:



Right now we're sitting at an oversold position considering all indicators. As with so many stocks on the rise, I believe that around $29-$30 we'll see a short peak and a day or two more of sell-offs for people to get out with the stock's little strength. That's the time to start buying, on the first day down. If we get a 2nd or 3rd day down, it'll just be there to average down as after that, the stock should start to move up again (as will the OIH, XOM, Sweet Crude comodity, etc.) I think what we have right now is a nice level to start a position in. A support level if you will. My target will be closer to around $37. This won't be quite as high as we've seen in the past, but I don't forsee gas prices being at the extreme levels they were last summer. I'm going to do a bit more reading into stocks like RIG, CVX and NBR to see who actually has contracts still going on now when money is short vs. those who are trying to get oil companies to spend when they are down.