TGE and DWSN comparison

Posted by downtowntrader | 4/18/2007 04:27:00 PM | 4 comments »

Btuff posted another monster article over at RegulationFD. He goes into a deep comparison of two seismic data acquisition companies (DWSN and TGE). Below is my technical take for the two companies. I am introducing a ratio chart to show the relative performance of the two companies against each other.

TGC Industries, Inc. (Public, AMEX:TGE) vs Dawson Geophysical Company (Public, NASDAQ:DWSN)

A ratio chart simply divides the two stocks and forms a ratio. The ratio is shown from the perspective of the first stock listed (TGE in this case). Thus a rising ratio means TGE is outperforming DWSN. A declining ratio means the opposite is true. The chart below clearly shows DWSN's recent outperfomance. While TGE has been consolidating for several months, DWSN is already in a clear uptrend. This may change soon though, as the ratio is towards the bottom of an established range.

The interesting thing about ratio charts, is that trendlines and moving averages, etc. can still be applied to them. I like to use ratio charts to plot the relative strength of gold/dollar, gold/silver, DIA/QQQQ, etc. If you look at each stocks individual chart lower on the graph, TGE looks to be just breaking out of a consolidation, while it wouldn't be unreasonable to expect a pullback in DWSN. It's tough to say they will move in different directions, as they belong to the same sector, but TGE is probably the better value from a technical perspective.

(click on chart to enlarge)


While TGE may be in a better near term position, you can't argue that DWSN has been the stronger of the two, and may be an interesting play on a pullback. Either way, the sector looks pretty decent here and both may well end up being solid plays for some time to come. Make sure to read the fundamental take on RegulationFD, and please do your own due diligence.

disclosure: I don't own any shares of either company. Also, TGE reports tomorrow so don't do anything rash cause of this post.


Good Luck,



Joey

4 comments

  1. JWU // 12:10 AM  

    love your blog, and i would like 2 discuss with you some ideas involving forming a stock trading network of sites with me and other stock bloggers.

    please shoot me an email at

    roundersfan [ATTT] gmail

  2. Tuff // 1:45 AM  

    Busta Charts...your blog is ok but that tuff guy rocks.

    Rock on,
    Tuff

  3. paige386 // 7:45 AM  

    Great work by both of you guys! Maybe we should call you the Bloggly Fools......

    Lets make some damn money

  4. downtowntrader // 9:15 AM  

    Glad I can drop some knowledge on you Tuff.

    Thanks Paige.

    JWU, I assume you're Johns of bulltrader, but I couldn't find a link on your profile. Sounds interesting, I'll shoot you an email. I'm a fan of your site as well.


    Joey