JUMP IN ENERGY PRICES BOOSTS OIL SERVICE STOCKS -- TRANSOCEAN, NABORS, AND NOBLE DRILLING NEAR BULLISH BREAKOUTS
POSTWAR HIGHS... Energy prices are jumping again today. Natural gas is up 5% to a new recovery high. Heating oil and crude oil are also trading at the highest levels since last spring. Chart 1 plots an index of energy prices and shows it trading at the highest level since before the start of the Iraq war. Needless to say, the continuing uptrend in energy commodities is having a bullish impact on the energy sector. Oil service stocks are especially strong. Chart 2 shows the Oil Service Index rising to the highest level in seven months.
Chart 1
Chart 2
TRANSOCEAN ON VERGE OF BULLISH BREAKOUT... Transoocean is one of the day's biggest gainers in the oil service group. The weekly bars show the stock on the verge of breaking through the highs of the last sixteen months. Volume is rising on the price advance which increases the odds for a bullish breakout in this oil service leader.
Chart 3
NABORS AND NOBLE DRILLING NEAR BREAKOUTS... Two other oil service stocks that appear to be approaching bullish breakouts are shown below. Nabors is within striking distance of its summer high near 46. Noble Drilling is testing the top of a potential bottoming pattern going back to the middle of 2002. In both cases, rising weekly volume increases the odds for bullish breakouts.
Chart 4
Chart 5
