Buying on the Oil Pullback
Oil has had a rough few weeks in the market. The benchmark West Texas Intermediate crude price is down some $9 a barrel, or 10% since Sept. 14. It also closed below $90 a barrel for the first time since Aug. 2. Although I don't like what this price action might be saying about the strength of the domestic economy, I agree with T. Boone Pickens that near-term downside is probably around $85. The price should be supported by the reaction to QE3 and recent economic reports that show strength. Stocks in both in the oil services and oil producers have fallen some 5% just in the last few trading sessions and have fallen in line with the decline in oil prices since mid-September. This looks like a good opportunity to deploy some new money in the sector as these stocks should pop back once the decline in oil prices arrests itself. Here are two stocks that have had 10% pullbacks and appear cheap at current levels.
Superior Energy Services (SPN) provides specialized oilfield services and equipment to serve the production and drilling-related needs of oil and gas companies....252 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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