I'm looking for a breakout to $52 (38.2 Fib Retracement), pullback to $48 (23.6 Fib Retracement), at which point i'm buying with a price target of $55 (50% Fib Retracement).
Could go higher, but the upside will be relatively capped given the level of the current US fracklog. Once prices justify completing and turning on these backlogged wells, it will cause the E&Ps to turn on the spigot, again pushing supply to a point where prices will have to react. (There is headline risk given potential Iran deal and capacity issues at cushing)
On a fundamental level, the recent divestiture of assets in concert with the baker hughes merger should be a long term positive for the company. I'd also look for them to further consolidate once the deal goes through as some smaller oil/gas service companies will start to feel the financial stress of the downturn during this time. Many of them operate in the more marginal areas of the shales/basins resulting in a higher breakeven cost given an expected return of about 10%. I'd also look for