BJS provides pressure pumping and other oilfield services serving the petroleum industry worldwide. BJS%s services include well stimulation, cementing, sand control and coiled tubing. For the 3 months ended 12/31/00, revenues increased 38% to $489.7M. Net income totaled $63.5M, up from $20.5M. Revenues reflect an increase in North American drilling activity. Net income also reflects improved equipment utilization.

April 8, 2001

BJ Services (BJS) is a principal supplier of pressure pumping and oilfield services to the petroleum industry worldwide. Demand for the company's services is dependent upon the number of oil and natural gas wells being drilled, the depth and drilling conditions of such wells, and the level of activity worldwide. Currently, the company is benefiting from strong activity in the North American oilfield market. But, aside from BJS’s solid fundamentals, the chart may have just completed a “V” bottom formation. This has been a familiar pattern over the last few months, as quick rallies have unfolded off such reversals. What’s more, the company announced a 2:1 stock split on March 22rd, which could help to generate extra buying ahead of the record date of May 17th. As for the stock, BJS shares, after coming down from highs just last week, may have already formed a near-term bottom. The technical indicators certainly suggest this, with the MACD on the verge of a crossover and the stochastic signaling a mid-week buy signal. Bearing this in mind, should shares trend higher in the upcoming week, we’ll look for initial resistance to occur at $72.75, then the 20-dma of $73.15, followed by a stiffer challenge at the 50-dma of $77.16. Support will come at the $70 mark. Look to time entries when BJS shares bounce off support or break above the 20-dma on volume of at least 850,000 shares traded by midday. We are setting our initial stop at $67, to minimize our downside risk.

Picked on April 8th@ $71.75
Change since picked 0.00
Stop Loss @ $67.00

April 10, 2001

Higher prices for oil and natural gas are generating strong demand for BJS’s drilling services, which should help the company to generate an increase in annual earnings of 79%. Turning to the chart, BJS shares delivered another nice rally on Tuesday, recovering 2% to close at $74.00. The advance came on good volume of 1,755,600 shares, which topped the three-month average. This is further indication that the stock is attracting more investors with each leg higher. What’s more, the stock was able to gap above Monday’s resistance at the previous high of $73.95 and hold ground above the 20-dma of $72.54. The short-term technical picture also looks encouraging, with bullish crossovers in the MACD and stochastic pointing to more upside strength. With all these indications, a near-term rally to $75 or $80 can be expected. For entry points, we’ll now look for an upside move to encounter resistance at $75 and then at the 50-dma of $76.98. Support will come in at the 20-dma. Traders can consider entries when the stock breaks through resistance or bounces from support on good volume of 750,000 shares traded by midday. We suggest moving stops to $70 to help limit downside risk and lock in gains.

Picked on April 8th@ $71.75
Change since picked +2.25
Stop Loss @ $70.00