Weatherford International - WFT - close 17.73 change +1.01 stop 15.90

Company Description:
Weatherford International Ltd. (Weatherford) is a provider of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells. It conducts operations in approximately 100 countries and has service and sales locations in the oil and natural gas producing regions in the world. The Company’s product offerings are grouped into ten service lines: drilling services; artificial lift systems; well construction; completion systems; integrated drilling; drilling tools, re-entry and fishing; stimulation and chemicals services; wireline and evaluation services, and pipeline and specialty services. Its geographic reporting segments include North America, Latin America, Europe/West Africa/ the Former Soviet Union (FSU) and Middle East/North Africa/Asia. In July 2009, the Company acquired the Oilfield Services Division (OFS) of TNK-BP. (source: company press release or website)

Why We Like It:
WFT double bottomed on last week on April 19 and 22 (see oval on chart) and has since exploded. It has also broken a downward trend line This was probably due to data released late last week regarding oil rig count activity which is through the roof. Rig counts are near all time highs in many parts of the United States. We are talking about 25%+ sequential quarterly growth, in both oil and gas. This should bode well for WFT and their sector. And I would like to participate in this momentum on the first WFT pullback. I suggest traders buy June calls if WFT trades to $17.55. There is some resistance at $17.80 but I think it's only a matter of time before it busts through this level. I am going to place wide stop on this trade at $15.90. I think this trade has some potential but we may need to give it some time and room to work which is which is why I want to buy June calls.

Trigger to buy June Calls if WFT trades to $17.55

Suggested Position: JUNE $17.00 CALL, current ask $1.41, estimated ask at entry $1.30

Annotated Chart:

Entry on April xxth at $ xx.xx
Earnings Date Over 2 months
Average Daily Volume = 14.9 million
Listed on April 24 2010