Ease Out of Peaking Oil Drillers

Again, Nabors is the only undervalued oil driller, while the others have become 11.2% to 18.8% overvalued. Five of the Ocean's Seven do not have risky levels; this shows that these have become momentum trades that follow the chart for crude oil. Investors should reduce holdings of all these names on strength if crude oil tests my quarterly resistance at $75.94.

Baker Hughes' fair value, at $64.37, is about where it was on Feb. 17. Investors should reduce holdings on a sell stop below my monthly pivot at $73.70. The stock reached a new high today of $81.10, but continuing this move should be difficult and not worth keeping the full bet on the table.

Diamond Offshore has seen its fair value shift upward, to $84.53 from Feb. 17's $82.93. The April 25 high of $96.30 should be the high for the move, so investors should reduce holdings using a sell stop below my quarterly pivot at $89.15.

GlobalSantaFe probably saw its high for this run on April 19 at $65.21. Therefore, with fair value up to $54.16 from $52.99 on Feb.17, investors should reduce holdings using a sell stop, given a weekly close below the five-week modified moving average at $60.62, which will be rising each week -- until there is a weekly close below. As you adjust the sell stop higher, you protect a larger gain.

Fair value for Halliburton has actually declined to $66.35 from $69.68 on Feb. 17. That only serves to make it more overvalued, so investors should reduce holdings on strength to my monthly risky level at $84.31, or on a sell stop given a weekly close below the five-week MMA at $75.26, which will be rising each week. The April 20 high at $83.97 is just below the risky level.

Nabors' fair value has declined to $39.02 from the Feb. 17 fair value of $40.95. Investors should reduce holdings on strength to my quarterly pivot at $37.98 and my monthly risky level at $40.52. The stock's April 19 high of $38.83 is still below the Jan. 31 high of $41.38.

Noble has seen a significant decline in its fair value, to $73.16 from $92.25 on Feb. 17. Investors should reduce holdings on strength to my monthly pivot at $84.93, or on a sell stop given a weekly close below the five-week MMA at $80.21, which will be rising each week. The April 20 high is $86.16, which should be the high for the move.

Transocean's April 21 high of $87.67 should be the high for the move. The stock's fair value has declined significantly, to $73.34 from $82.11 on Feb. 17. Investors should reduce holdings on strength to my quarterly pivot at $84.14, or on a sell stop given a weekly close below the five-week MMA at $81, which will be rising each week.

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