McDermott Sinks; National Oilwell, Oil States, Weatherford Float On

NEW YORK (TheStreet) -- The big story in the oil field services industry is McDermott (MDR) reported a huge earnings miss after the closing bell on Monday. The company missed analysts' earnings per share estimates by 96 cents reporting a loss of 80 cents a share, and then withdrew earnings guidance.

The stock closed Monday just below its 200-day simple moving average at $8.18, which is not a positive pre-earnings. This morning McDermott shares opened at $7.61 and traded as low as $7.25 as of 11:00 a.m. EST.

Today I crunch the numbers on McDermott plus three other oil-field services stocks that reported their quarterly results earlier in the year.

National Oilwell (NOV) reported quarterly results on Jan. 31 and beat EPS estimates by 17 cents earning $1.56 a share. This stock traded as low as $72.67 on Jan. 19 and since then the stock has been moving higher, trading back and forth around its 200-day SMA since Jan. 31, now at $75.97.

Oil States International (OIS) reported quarterly results on Feb. 19 and missed EPS estimates by 2 cents earning $1.49 a share. The stock was above its 200-day SMA on that day then fell below it the following day trading down to as low as $90.62 on Feb. 27. The stock opened higher today but is still below its 200-day SMA at $98.88.

Weatherford international (WFT) reported quarterly results on Feb. 25 and matched EPS estimates earning 7 cents a share. The stock was in rally mode going into this report after setting a 2014 intraday low at $13.07 on Feb. 3. Weatherford has been above its 200-day SMA since Feb. 13 with this level now at $14.93. The stock continued to move higher after their earnings report on brokerage upgrades.

A detailed technical analysis chart about these stocks follows today's profiles and explains my number-crunching terms.

On to the analysis:

McDermott ($7.61 at today's open, down 16.9% YTD): The stock is below all five key moving averages in today's "Crunching the Numbers" table. The weekly chart has been negative with its five-week modified moving average at $8.28. I do not have a nearby value level and the stock is below my monthly pivot at $8.03 and the stock broke below its quarterly risky level at $8.96 on Jan. 23.

National Oilwell ($77.77 at today's open, down 2.2% YTD): The stock is above all five key moving averages shown in Tuesday's table. The weekly chart turned positive at Friday's close above its five-week MMA at $76.74. My weekly value level is $73.34 with quarterly and monthly risky levels at $80.72 and $85.30.

Oil States ($96.17 at today's open, down 5.5% YTD): The stock straddles its five key moving averages shown in today's table so the near term key for upside momentum is having a close today above its 21-day SMA at $96.13. The weekly chart shows rising 12x3x3 weekly slow stochastics and thus a weekly close above its five-week MMA at $96.88 is required to turn the weekly chart to positive. This week's value level is $93.13 with a quarterly pivot at $96.16 and monthly risky level at $104.34.

Weatherford ($16.50 at today's open, up 6.5% YTD): The stock is above all five key moving averages shown in today's table. The weekly chart turned positive at Friday's close above its five-week MMA at $15.36. My weekly value level is $14.63 with a monthly risky level at $17.12.

Crunching the Numbers with Richard Suttmeier

In the column labeled Last 12-Month Return I show the percent gain or loss over the last 12 months.

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (stocks below a moving average listed in Red are below that moving average)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (Even Apple declined to its 200-week SMA in June 2013.)

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (Even Apple tested or crossed its 200-day SMA in nine of the last 10 years.)

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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