3SOF

David Randolph · July 25, 2005, 06:57:16 AM

Grey Wolf, Inc. (GW). The Group's principal activity is to provide contract land drilling services to the oil and gas industry in the United States.

GW has been around for a long, long time. My stock database only goes back to 1980, and Grey Wolf is there:

On the short term chart, we can see that volume has been awesome for the last couple of months:

We have an uptrend in place, volume above average for several days and a bullish breakout on Friday. As a friend of this website says «it doesn't get much better than this».

This stock could have a «no brainer» technical trading plan. Buy and hold the stock as long as it closes above the blue trendline.

3 Stocks on Fire Community take on GW

GW has passed through my technical filters too many times for me to continue ignoring it. I'm buying GW at today's open, 6.66% of capital.

This analysis is part of «Top 5 Stocks for Monday», conducted by David Randolph from 3 Stocks on Fire. David Randolph is managing a public and diversified portfolio which is up 140% since May 2005.

At www.3stocksonfire.org we have a vast community of investors, traders and speculators that everyday exchange stock picks, trading strategies and much more. If you want to join our community and receive our free newsletter, please register.

Melf Elf · July 25, 2005, 09:12:02 AM

Looks like a nice pick, David. Very well-defined Symmetrical Triangle with 3 hits to the top of the pattern...4 hits to the bottom of the pattern. Broke out on Friday. I'll buy this one if it retraces some of Friday's candle. 7.80 - 7.85ish.

yuyjust · July 25, 2005, 06:40:56 PM

Hi David
Earning report for GW is coming out this Wed. Do you think it will effect the uptrend in anyway. Do you anticipate a good erning on the report ? TIA

David Randolph · July 26, 2005, 07:31:34 AM

I don't know yuyjust, but considering the market action the news will be positive. My trading plan is very simple on GW: hold as long as the stock closes above the ascending trendline on the chart below.

The stock closed yesterday at $8.20 on AH.

Melf Elf · July 27, 2005, 08:36:55 AM

Yesterday's candle for GW shows a Hanging Man with a very long tail at 7.57. I'm almost sure that's a bad tick, if it matters to anyone. I wanted GW in the low to mid-7.80s, and it never traded near there on my intraday chart. The low yesterday was only around 7.94-ish. FWIW (For what it's worth).

David Randolph · July 27, 2005, 08:39:15 AM

What a strange candle on GW, was this low for real? I didn't watch the intraday ... if it was for real it was a great test to support, very bullish.

Earnings came out after the close: Grey Wolf, Inc. Announces Operating Results for the Quarter Ended June 30, 2005

They seem great !

(you've probably already noticed I'm running out of time on these updates before the opening bell. If you have any comments to add, I'll appreciate it)

The plan is to hold GW as long as it closed above the ascending blue trendline.

Melf Elf · July 27, 2005, 09:12:59 AM

Quote from: David Randolph on July 27, 2005, 08:39:15 AM
What a strange candle on GW, was this low for real? I didn't watch the intraday ... if it was for real it was a great test to support, very bullish.

You were typing when I posted on yesterday's candle, 3 minutes before your post.
Scroll back.

David Randolph · July 27, 2005, 09:17:38 AM

Thanks for the input Melf Elf, it really would have been a strange day on GW. It was a pity you couldn't bought around $7.80 ... (well, we'll see about that).

Melf Elf · July 27, 2005, 09:40:55 AM

Quote from: David Randolph on July 27, 2005, 09:17:38 AM
Thanks for the input Melf Elf, it really would have been a strange day on GW. It was a pity you couldn't bought around $7.80 ... (well, we'll see about that).

Thanks, David. Just bought GW at 7.78 on the pullback to the Symmetrical Triangle breakout. Stop is a CLOSE or obvious late day tank below 7.51. Risk: a loss of 3.5%.

Melf Elf · July 27, 2005, 03:59:54 PM

Quote from: Melf Elf on July 27, 2005, 09:40:55 AM
Thanks, David. Just bought GW at 7.78 on the pullback to the Symmetrical Triangle breakout. Stop is a CLOSE or obvious late day tank below 7.51. Risk: a loss of 3.5%.

David,

Strange that GW took out yesterday's bad print of 7.57, by printing 7.53 today. It's as though the chart knew something yesterday

We're fininshing today on a bullish hammer off important support. Holding my postion.

Melf Elf · July 28, 2005, 03:54:48 AM

Yesterday's action looks to be a classisc case of "buy the rumor...sell the news." From what I can discern, the earnings were fine, but that already had been anticipated during the rally GW has enjoyed. When earnings came out, they "sold the news." That's fine, as long as "selling the news" doesn't mean trashing the stock, and breaking important support.

When I bought at 7.78 yesterday morning, I hoped that I was catching it near the low of the day, and that it would rally off a re-test of the top of the Symmetrical Triangle. Instead, it went down and re-tested both David's up trendline (in blue) AND the bottom of the Symmetrical Triangle (in brown), then it rallied into the close, putting a Bullish Doji Star Hammer on the chart (needs upside follow-thru to confirm).

As it stands, yesterday was a successful re-test of DOUBLE support (held two trendlines). We shouldn't see the low of 7.53 get taken out at all,and certainly not on a closing basis. If we go back down to that area, especially on volume, I likely won't wait to get stopped out below 7.51 on a closing basis. I'll take the 3.5% loss on the trade.

David Randolph · July 28, 2005, 06:49:34 AM

Melf Elf absolutely said it all, I agree with him on all fronts, be it on the interpretation of market behaviour or on technical analysis.

GW must be set to close above $7.64 or I'll have to take a small loss. It doesn't look like I'll have to do that, though. The trendline held strong on yesterday's all important session.

David Randolph · July 29, 2005, 09:39:29 AM

Yesterday's closing action was too close to call, so I kept GW. To maintain the ascending trend intact, the red candle from yesterday shouldn't have continuation today, so my plan on GW is to keep the stock if it closes higher, and sell it if it is set to close lower.

David Randolph · August 01, 2005, 08:54:35 AM

Just barely, but GW held the line on Friday's close. I expect a rally today (we may get some help from a bullish article at the Street.com) on oil drillers.

Anyway, GW should close higher today for me to continue holding the stock. That's my plan (hold as long as the close is above an ascending trendline) and I will follow it !

BadarZ · August 01, 2005, 09:03:04 AM

King Fahd dies today.

Oil Climbs as Saudi King's Death Adds to Concern About Supplies

Aug. 1 (Bloomberg) -- Crude oil rose above $61 a barrel in New York after Saudi Arabia's King Fahd, ruler of the world's largest oil exporter, died, heightening concern about supplies following refinery disruptions in the U.S. and Europe.

More...http://tinyurl.com/cdnzx

News:

GW