A Buy rating would have been generated earlier, but the $50 level and the 50-day moving average argued against it: DVN has since cleared and held both, and with earnings growth in sight, it's now a reasonable, moderate-risk play.

In general, analysts like Devon's prospects for production increases, aided by improving output at its Barnett Shale properties and the commencement of production at the Jackfish Canadian oil sands project.

Second, successful tests in the Gulf of Mexico's Lower Tertiary Trend, and a strong collection of deepwater drill sites have also heightened analysts' oil production expectations. Meanwhile, natural gas production is will likely remain flat, or record FY 2009 results slightly below FY 2008.

In addition, Devon is selling international assets to focus on higher-growth operations, with proceeds to be used to reduce debt, repurchase shares and invest in projects. The First Call FY 2009/FY 2010 EPS estimates for DVN are $2.21/$4.90.

Stock Analysis: Devon Energy is moderate-risk stock. Consider buying a 25% position in DVN now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your DVN position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $28.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.