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 8, 2001

Texaco scored another 52-week high on Thursday. The increased trading volume that accompanied today's move legitimized the advance. TX normally trades about 1.7 million shares based on a three-month trading average, but today's record was achieved on volume of 2.4 million, a 41% increase. If you are considering opening a new play on TX look for a bounce off support at $68.33, the 5-dma, or a move higher on strong volume of 1.2 million shares traded by midday. The INDU was very helpful today; we'd look for similar cooperation going forward along with the help of a positive movement in the Oil Service Index (OSX.X). In order to secure a profit on this play, we are going to tighten our stop loss to $68.00.

Picked on February 18th at $64.90
Change since picked +5.15
Stop Loss at $68.00

March 6, 2001

Like a geyser of oil, Texaco exploded to a new 52-week high on Tuesday. Texaco began the week on a strong note gapping open and posting a new high. Tuesday the stock again posted another high and confirmed its move with impressive volume. TX normally trades on volume of 1.7 million shares, but Tuesday made the third day in a row that TX traded on volume over 2.5 million shares. The increased volume coupled with ongoing new highs is a sight we like to see. Texaco has been a momentum play for a few weeks now and has been a good performer considering the recent market conditions. The company is moving ahead with its planned merger with Chevron (CHV) and there is no reason to believe that further gains aren't possible. Going forward, if you are considering a new play on TX, the maker of outdoor all-terrain recreational vehicles possible entry points might include a bounce off support at the 5-dma at $66.37 or a move through resistance at today's high of $68.36. Look for good volume over 1.2 million traded by midday when considering new plays. Added support from the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) would be helpful as well when thinking about a new position on TX. We are going to tighten our stop on this play to $66.00 and thus ensure ourselves a profit from this play.

Picked on February 18th at $64.90
Change since picked +3.00
Stop Loss at $66.00

March 4, 2001

Texaco Incorporated finished the week on a high note as plans for their merger continue to come together. On Friday Texaco, soared to a new 52-week high after Wall Street received more optimism regarding their merger with Chevron (CHV). This past week the proposed merger between Texaco and Chevron received approval from the European Union (EU) and now awaits the same from the U.S. antitrust authorities. On Friday a news story from Reuters announced the following: "Barring unforeseen circumstances Chevron and Texaco's planned merger should make it past U.S. antitrust authorities within three months". If all goes as planned a completion to the deal would come in early July. Traders responded favorably to the announcement and shares of TX rose better than 2% on Friday. The stock closed at a new high of $66.84 that was achieved on volume of 2.5 million shares, 38% greater volume than its three-month average of 1.8 million. TX is in a nice position to move even higher, as merger fever continues to rise. Next week look for another new high or a quick bounce off of support at $65.00 when considering a new play in TX. Volume will be a key component to further gains; we'd look for follow through volume of at least 1.2 million shares traded by mid-day. Past breakout volume from TX has exceeded 3 million shares and we should expect no less here. Additional support from the Dow Jones Industrial Average (INDU) and the Oil Service Index (OSX.X) would be helpful as well. We have placed a stop loss on this play at $61.88.

Picked on February 18th at $64.90
Change since picked +1.94
Stop Loss at $61.88