XTO - Cross Timbers Oil $26.85 +1.23 (+2.02)

Tuesday's Comment:

Cross Timbers Oil enjoyed a very strong day, even though gains in the AMEX Oil and Gas Index (XOI) were modest. It is entirely possible that XTO is a beneficiary of a consolidation trend within the industry. Barrett Resources (NYSE:BRR) agreed to be acquired yesterday by Williams Cos (NYSE:WMB), and, consequently, enjoyed a nice spike up in its share price. Cross Timbers Oil and Barrett Resources are similar companies because both are land based regional drillers. Today's rally was technically significant because XTO crossed over and closed above its 50-DMA of $26.41. The last time this event occurred, XTO traded straight to $28.75. XTO may test this resistance soon; therefore, additional positions could probably be added tomorrow assuming XTO stays above the 50- DMA and does not gap up to the $28.75 resistance on the open. Today's volume of 888,700 was solid and we would be more encouraged about adding to positions if XTO starts ticking up with first hour trading volume exceeding 200,000 shares. Even more encouraging is the fact that a rally tomorrow would likely cause the MACD to issue a buy signal. Please note that we have raised our trailing stop to $25.50.

Picked May 6th @ $24.83 Change since picked +2.02 Stop Loss @ $23.50

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