Texaco is engaged in the worldwide exploration for and production, transportation, refining & marketing of crude oil, natural gas liquids, natural gas & petroleum products. For the 9 months ended 9/30/00, revenues rose 46% to $36.70B. Net income applic. to common totalled $1.99B, up from $833M. Revenues reflect higher crude oil and natural gas prices. Earnings reflect an increase in gross profit & a decrease in exploratory costs.

February 18, 2001

Texaco is an integrated global energy company that operates in some 150 countries around the world. The company explores for and produces oil and natural gas, manufactures and markets high-quality fuels and lubricants, operates trading, transportation and distribution facilities and produces power. This weekend we are adding TX to our list of momentum plays because of the stock’s strong relative strength. The stock established a new 52-week high on Friday of $65.65 even in light of the fact that the broad markets both finished down more than 90-points. The company was recently given an upgrade to the "recommended purchase" list at Goldman Sachs. Additional good news for TX was the signing of a new deal with Nigeria for natural gas exploration. Nigeria, Africa's top oil producer and OPEC's sixth largest exporter only joined the big players in the natural gas export market in late 1999. If the exploration is successful, TX and other parties involved could stand to profit handsomely. If you like what you've heard so far and are considering opening a new play in TX, here are a few suggestions. Look for the stock to move higher on heavy volume and hit another new high as a possible entry point. Here heavy volume would mean more than 1 million shares traded by 1:00 EST. The stock normally trades about 1.4 million shares per day based on a 3-month average. Friday's new record was achieved on 2.3 million shares. Another opportunity might exist if the stock were to bounce off support at $64.22, the 5-dma, or another support level at $63.45 or $61.98, the 10 & 20-day moving averages. In either event, the volume will be critical when considering a new play. Additional support from the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) would be helpful as well. We will place a stop loss on this play at $61.88.

Picked on February 18th at $64.90
Change since picked 0.00
Stop Loss at $61.88

March 1, 2001

Texaco received merger approval from the European Union (EU)and could soon be the world's fourth largest oil company. On Thursday, Texaco moved closer to a merger with Chevron (CHV). Texaco and Chevron have been in merger talks for a while now. and although the deal is not set in stone, today's hurdle was a big one. The next step will be approval from U.S. antitrust authorities, which sources familiar with the situation said will take some time. Once the merger is complete, the combined firm would have an output of 2.7 million barrels of oil per day. The two firms have interests in more than 40,000 gasoline stations around the world. For us, the news brought this play back into profitable territory, barely. We are now looking to reap some further gains and would like to see the stock bounce off support at $64.50 or the 20-dma at $63.40. This, or a direct move through resistance at $65.65, might trigger an entry point for a new play on this stock. If you are considering such a move, look for volume to come in at better than 1 million shares traded by mid-day. Thursday's advance was achieved on volume of 1.6 million, just shy of the three-month average of 1.8 million. In the event that things run-a-muck, we will post our stop loss at $61.88.

Picked on February 18th at $64.90
Change since picked +$0.30
Stop Loss at $61.88

February 27, 2001

Texaco shrugged off a downgrade from Prudential Securities and moved higher today. On Tuesday, right at the open of trading, TX moved higher and fought to hold its gains all throughout the day. Intra-day, TX traded as high as $64.43 before it eased back into the close. The trading volume for the day came in below the average at 1.5 million shares. Normally, TX trades about 1.8 million based on a three-month cumulative average. This momentum play looks like it might be gearing up for another run at a new high. Currently, TX has a 52-week high of $65.65 that was achieved on February 16th. Looking to the rest of the week, we'd like to see resistance at $65.00 conquered on 1 million shares traded by mid-day. Support is marked at the 10-dma at $64.00 and then back at the 20-dma at $63.17. When considering a new play on TX, look for support in the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X). We will keep our stop loss on this play at $61.88.

Picked on February 18th at $64.90
Change since picked -0.83
Stop Loss at $61.88

February 25, 2001

Texaco, Inc. is primarily engaged in the worldwide exploration for and production, transportation, refining and marketing of crude oil, natural gas liquids, natural gas and petroleum products and power generation. The most noteworthy news event surrounding TX this week was a story from Venezuela. TX has been working on a joint venture to extract 272 billion barrels of previously unusable tar-like heavy crude oil from the earth and ocean floor in South American country. Once excavated, the crude will be converted into marketable petroleum products worth billions of dollars. Although this news might have a positive effect on the stock, with continued profit warnings and an easy market, TX will have to wait until buyers emerge. TX fell on Friday along with the broader market. The drop in share price was buffered at the 20-dma at $62.89, which is the first level of support for TX. Below that there is a consolidation area of light support at $62.00. Overhead, TX will likely encounter resistance at $64.00 where the 5 and 10-dma's are merging and then up at $65.00. Friday's trading volume was about average for TX at 1.7 million. Consider opening a new position on TX if the stock bounces off the 20-dma on good trading volume, meaning better than 1 million shares traded by midday, or moves through resistance on the same level of volume. Watch for strength in the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) when pondering opening a new position. We will post our protective stop loss at $61.88 just below support.

Picked on February 18th @ $64.90
Change since picked -1.85
Stop Loss at $61.88