NEW YORK (TheStreet) -- Buying any oil services stock that is trading near or below its post-bubble lows set in late-2008 into early-2009 is like trying to "catch a falling knife". This is the investment landscape with Nymex crude oil futures down 38% year to date but 90% above its post-bubble low of $33.20 set in January 2009.
Here are four oil services stocks that are trading at or significantly below their post-bubble lows. Diamond Offshore Drilling (DO) is down 38% year to date and is 39% below its post-bubble low at $49.28 set in March 2009. Noble (NE) is down 44% year to date and is just 2.5% below its post-bubble low at $16.80 set in December 2008. Transocean (RIG) down 58% year to date and is 55% below its post-bubble low at $41.95 set in December 2008. Tidewater (TDW) is down 45% year to data and is just 0.2% above its post-bubble low at $31.09 set in March 2009.
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When you have this wide a divergence between the price of a commodity and the companies that extract it, the weak stocks may be the better investment than the commodity itself, but beware of the risk of catching a falling knife.
Diamond Offshore ($29.91) was a $16 stock back in November 2003 which is a level at which to add to positions if you decide to enter a "good 'til canceled" limit order to buy weakness to the Dec. 1 low at $29.00. The near term upside is to a key technical level at $33.75.
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