Offshore Drilling Stock - HERO

Offshore Drilling Stock got the death sentence last year following US government's temporarily ban on offshore drilling following BP's Deepwater Horizon disater.  Player such as Seahawk Drilling has just raised the white flag recently by fire-selling $400 million assets to Hercules Offshore (HERO) for a deep discount of $100 million including 20 drilling rigs.  This could be good news as Hercules Offshore now has one less competitor to worry about in the Gulf of Mexico.  However the biggest enemy for Hercules Offshore at the moment is probably not the competitor but US government's temporarily restriction on offshore drilling.  


Following the deal, many analysts saw this as a plus for Hercules Offshore and upgraded the target price of the stock to $6.  Shares of Hercules Offshore is traded at $4.28 at the close today, up 3.38% despite 2% plus drop on Nasdaq and S&P 500.  The technical chart shows bullish trend as both 50 and 100 day moving average are heading up while KD line is near 80.  The stock is still traded way below its 2008 high of $38 per share so maybe this is the time to grab more shares of HERO while they are still cheap.  A lift in ban on offshore drilling in the Gulf of Mexico could easily push this stock into double digit.  So lets wait and see.