BHI $82.20 - Baker Hughes
A continuation of last week's dip triggered the breakdown entry at $80 on no news. There is no reason for BHI to be falling other than the drop in natural gas drilling in Canada. The tax change has taken many potential well sites off the market. That is now old news and $20 ago in price when BHI was $100. The current support at $80 should be reasonably strong.
Baker Hughes Incorporated supplies products and technology services, and systems to the oil and natural gas industries worldwide. It operates in two segments, Drilling and Evaluation and Completion and Production. The Drilling and Evaluation segment provides products and services used to drill and evaluate oil and natural gas wells. Its products include drilling fluids, completion fluids, drill bits, and fixed-cutter polycrystalline diamond compact bits. This segment also offers fluids environmental services; drilling and evaluation services, which include directional drilling, measurement-while-drilling, and logging-while-drilling services; and formation evaluation and wireline completion, and production services. The Completion and Production segment provides wellbore construction, cased-hole completions, sand control and wellbore intervention solutions, as well as offers oilfield chemical programs for drilling, well stimulation, production, pipeline transportation, and maintenance programs. The segment also provides electrical submersible pump systems and progressing cavity pump systems. In addition, the company offers permanent monitoring systems and chemical automation systems. Baker Hughes offers its products primarily through its sales organizations, as well as through supply stores, independent distributors, agents, licensees, or sales representatives. The company was founded in 1972 and is headquartered in Houston, Texas.
Breakdown target: $80 Hit 12/17
Position: 2009 $90 LEAP Call VBH-AR @ $8.40
DNR $28.76 - Denbury Resources
Denbury Resources split 2:1 on Monday and dropped to $26.34 by day's end. The pre-split breakdown entry trigger was $53 or $26.50 post-split. The Monday afternoon dip triggered that entry. The post split option (no LEAPS) is the June $30 call option DNR-FF. I let this split slip up on me but the outcome was the same. We got an excellent entry and the stock is already up nearly 10% from that level.
Denbury Resources, Inc. engages in the acquisition, development, operation, and exploration of oil and natural gas properties in the Gulf Coast region of the United States, primarily in Louisiana, Mississippi, Alabama, and Texas. It holds interests in the Barnett Shale area in north central Texas; land and marshes of south Louisiana; and carbon dioxide reserves in the east of the Mississippi river. As of December 31, 2006, the company had 721 gross oil producing wells and 402 gross natural gas producing wells; and approximately 126,185 MBbls of proved oil reserves and 288,826 MMcf of proved natural gas reserves. Denbury Resources was founded in 1951 and is headquartered in Plano, Texas.
Breakdown trigger: $53, post split $26.50 hit 12/17
Position: June $30 Call DNR-FF @ $2.25
CSR $22.16 - China Security & Surveillance Technology
This company got a lot of buzz when it came public but faded fast. That fade is rapidly disappearing and a break over $24 could be the beginning of a strong run. The correction in the Asian markets should end with the end of 2007. Once into 2008 we should see another rocket ride higher on Chinese stocks.
China Security & Surveillance Technology, Inc. (CSST), formerly known as Apex Wealth Enterprises Limited, is a holding company that owns two direct subsidiaries, China Safetech Holdings Limited and China Security & Surveillance Technology (PRC) Ltd. The Companys primary business operations are conducted through its indirect subsidiaries Golden Group Corporation (Shenzhen) Limited (Golden) and Shanghai Cheng Feng Digital Technology Co. Ltd. (Cheng Feng). Goldens business is focused on manufacturing, distributing, installing and maintaining security and surveillance systems in China. Cheng Fengs business is focused on the manufacturing, marketing and sales of security and surveillance related hardware, as well as the development and integration of software. CSST generates revenues primarily through the installation of security and surveillance systems, and sales of security and surveillance products.
Breakdown trigger: $21.00 hit 12/20
Position: Jun-08 $25.00 Call CSR-FE @ $3.00 (no leaps)