Wednesday, January 5, 2011

STX OSV - Jan 5

Today, I sold STX OSV today. Just for the record, I bought STX OSV at 1.01 and sold at 1.16 today... a nice profit of 14.85% (before broker fees) considering my short holding period of less than a month.

So why did I put a sell order yesterday night? Mainly based on technicals... on monday, STX OSV rose strongly. However, on tuesday, STX OSV fell on higher volume with a large dark bearish candlestick... furthermore, with stochastic and RSI overbought...I reckon I would be better sell off now, and buy back later...

As for the technicals seen today, I see an "indecision doji" which likely showed that investors are undecided on whether to push STX OSV higher or lower... till the counter direction is clear, I would stay away from it..

Finally, I am still long-term bullish on this counter. STX OSV is involved in the oil and gas industry and in particular the building of drillships to extract oil from deepwater. I believe that much growth could be seen in this sector as oil prices would likely rise in the future, due to strong demand from BRIC and other developing countries. And as the industrial saying "the easy oil has been extracted" is likely that the oil we drill in the future would come from deepwaters... and firms like STX OSV would likely benefit heavily from this future development.

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