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| PRIME
STOCK NEWSLETTER FOR FEBRUARY 23, 2005 |
Position
Statement: In our Prime
Recommendation Letter we attempt to identify the
recommendation with the highest probability of
moving higher. We recommend that stop orders
be placed at the time of purchase, and once
the position has moved profitable we recommend
a stop be placed a minimum of $0.25 above the
purchase price and moved higher as the position
moves higher. |
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Today’s Comments: The overall
market sharply lower yesterday. This move
lower appears to have been triggered combination
of sharply higher oil prices and previous
weakening of the market primarily in the high
tech and financial sectors. Yesterday's move
was broad based and saw the majority of the
sector indices I track move lower. The weakest
sectors on the day where the Airlines, Utilities,
Retailers, Internet, Consumer, Cyclical, Interactive,
Chemical, Broker/Dealer, Banking and Technology
indices. For all practical purposes the only
stock index I track that moved higher on the
day was the Gold/Silver Index. Bonds sold
off on the day, sending interest rates slightly
higher. My review of the charts from yesterday's
trading activity showed that almost every
single index I reviewed looked weak, and the
vast majority of the high volume stocks I
looked at also looked as if they were moving
lower. However with that being said, I have
2 problems in recommending a "short sale"
for today's trade: 1) The majority of the
stocks that look as if they are moving lower
appear to be just about their support levels
indicating that the potential profits from
any short sale might be rather limited, and
therefore not really worth the risk; and 2)
The Dow Jones Industrial Average closed right
on what I consider to be a support level.
The Dow Jones Industrial Average is the market
leader in my opinion. It is the drummer that
sets the beat that the other market participants
march to. Normally on days following one like
we had yesterday I would be very confident
the market was going to continue to move lower,
however I'm not positive it will with the
Dow closing on support like it did. So, with
today's recommendation I am playing it more
conservative by recommending a strong stock
from the best performing sector I can find.
The Bottom Line: Today is
going to go a long way in determining the
short term trend of the market.
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| Recommendation:
Anadarko Petroleum 'APC' |
| Company:
Anadarko Petroleum Corp. |
Symbol:
'APC' |
Closing
Price: $70.41 |
| YH:
$71.55 YL: $49.52 |
EPS: $6.37 P/E: 11 |
Forecasted
EPS: $6.15 |
| Shares
Outstanding: 250 Million |
Float: 245
Million |
Market
Cap.: $18 Billion |
| Dividend:
$0.72 |
Yield: 1.02% |
Average
Daily Trading Volume: 2.4 Million |
| Price
Targets: $74.84, $81.70 then
$111.68 |
Downside Stop: $69.81share |
| Options
Recommendation: March 70 Calls @ $2.00/contract |
Options
Symbol: APCCN |
| Company
Description: Anadarko Petroleum
Corporation is an oil and gas exploration
and production company with 2.5 billion
barrels of oil equivalent of proved
reserves, as of December 31, 2003. Major
areas of operations are located in the
United States, primarily in Texas, Louisiana,
the mid-continent region and the western
states, Alaska and in the shallow and
deep waters of the Gulf of Mexico, as
well as in Canada and Algeria. Anadarko
also has production in Venezuela and
Qatar. The Company is executing strategic
exploration programs in several other
countries. It actively markets natural
gas, oil and natural gas liquids and
owns and operates gas-gathering systems
in its core producing areas. In addition,
it engages in the hard minerals business
through non-operated joint ventures
and royalty arrangements in several
coal, trona and industrial mineral mines
located on lands within and adjacent
to its Land Grant holdings (an eight-million-acre
strip running through portions of Colorado,
Wyoming and Utah). |
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Our Analysis: The
shares of Anadarko Petroleum Corp. 'APC'
set a new yearly high on heavier than
normal trading volume yesterday. This
is a bullish trading signal. The shares
of 'APC' are also a component of the
Amex Natural Gas Index 'XNG', which
I have rated as moving higher from its
current levels. The shares of 'APC'
should continue to move higher and test
$74.84/share, a point of upside resistance
that was established on December 28th
of 2000. Yesterday, the shares of 'APC'
completed a "cup pattern"
with a measured move to $81.70/share,
our next price target we expect the
shares of 'APC' to move towards after
they close above $74.84/share. Longer
term we have an upside price target
of $111.68/share. I see downside support
on the shares of 'APC' at $70.11/share,
and have set our downside stops accordingly
at $69.81/share. |
| Stocks
Looking Higher |
AMAT,
NOLVL, NVDA, MAY, KMG, VLO, XTO, CTIC,
BP, STLD, UCL, ECA, FST, MDG, UPC |
| Stocks Looking Lower |
MSFT, CSCO, RCL, AAPL,
GE, QCOM, EBAY, YHOO, C, TWX, JPM, HD,
NXTL, BAC, RIMM, KLAC, MER, BBY, AXP,
DOW, CZR |
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| Yesterday's
Edition of the Prime Stock Newsletter |
The
Sterling Investment series of newsletters is produced
by Sterling Investment Services, Inc. If
you would like to receive a chart on any index
or stock mentioned in this report please contact
us at the below mentioned numbers. We also
offer custom research reports on any stock investment
that you may desire information on. To receive
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our web page at: www.sterlinginvestments.com
If you would like to contact us our # is 800-275-6901,
fax # (404)-816-8830 Email address is: enelson@sterlinginvestments.com
Sterling Investment Services may hold positions
in the securities recommended or may be providing
consulting services to the companies mentioned
within this report. |
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1992-2005 Sterling Investment Services, Inc.
P.O. Box 191767, Atlanta, GA. 31119-1767
Fax 404-816-8830
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