Nabors Industries Ltd - NBR - close 21.57 change +0.00 stop 20.40

Company Description:
Nabors Industries Ltd. (Nabors) is a drilling contractor that conducts oil, gas and geothermal land drilling operations in the United States Lower 48 states, Alaska, Canada, South America, Mexico, the Caribbean, the Middle East, the Far East, Russia and Africa. As of December 31, 2009, the Company marketed approximately 542 land drilling rigs. It also operates as a land well servicing and workover contractor in the United States and Canada. The majority of the Company’s business is conducted through its various Contract Drilling operating segments, which include its drilling, workover and well servicing operations, on land and offshore. Its oil and gas exploration, development and production operations are included in the Oil and Gas operating segment. Nabors’ operating segments engaged in drilling technology and top drive manufacturing, directional drilling, rig instrumentation and software, and construction and logistics operations are included in its Other Operating segments. (source: company press release or website)

Why We Like It:
NBR convincingly broke a downtrend line on April 21st that began on January 8th. The stock immediately rallied and has since retraced about half of the gain from April 19th to April 26th. The stock has spent the last 3 or 4 sessions consolidating and has found buyers step in each day around the $21.00 level. This provides us a good reference point for placing a stop just below at $20.40, which is also below the 20-day SMA. I believe NBR is poised to move higher from here and suggest readers buy NBR stock at current levels or on any weakness. There is limited resistance up to $22.75 and then $23.45 which we will use as targets. Our time frame is a couple of weeks.

Suggested Position: Long NBR stock at current levels.

Option Traders:
Suggested Position: Buy JUNE $22.00 CALL, current ask $1.30

Annotated chart:

Entry on April xx at $xx.xx
Earnings Date July 5, 2010 (unconfirmed)
Average Daily Volume: 230,000
Listed on April 29, 2010