After reporting an incredible quarter before the bell, shares of Dawson Geophysical Co. (NASDAQ: DWSN) surged 23% during trading yesterday. For the quarter, Dawson earned 98 cents per share vs. analyst expectations of 76 cents per share. The company also handily beat revenue expectations. According to a statement by Dawson, the incredible results "reflect continued brisk domestic exploration activities by Dawson's clients, particularly those seeking natural gas."

This is no surprise -- Dawson beat expectations in four of the last five quarters. Like any company that consistently beats analyst expectations, shares of Dawson are up big in the last couple years. However, even at these levels I think the stock could make for an interesting momentum play.

Even after its surge in share price, the company's total market cap is only around $500 million without even considering the remarkably strong balance sheet. I expect Dawson to do about $290 million in sales next year -- slightly above the consensus estimate. On those sales, I expect an operating margin between 15 and 17%. This gives us an EBIT estimate of about $46.4 million. Assuming the company's cash balance remains roughly the same, this creates an "earnings yield" of about 9.2%. For a company growing at the ridiculous rates that Dawson is, I think this is a rather cheap price to pay.

Similarly, I think the technical perspective for the stock is very interesting:

Technician Michael Ashbaugh notes that many investors are showing a "fear of heights" that is increasingly evident on any signs of market weakness. The editor of The Marketwatch Technical Indicator feels these concerns are "understandable" given the market rise in recent months.

Futher, on a near-term basis, he agrees that the U.S. markets are "showing signs of tiring" and technical price action suggests a corrective phase is "more likely than not."

However, he states, "Setting aside the day-to-day price action, the longer-term backdrop remains distinctly bullish. With recent gains, the U.S. markets have staged a valid break to multiyear highs, and randomly calling market tops - or even raising near-term caution flags - has been counterproductive." He continues, "Market weakness will mark an opportunity, not a threat." Meanwhile the advisor is sees the oil service sector as particularly favorable.

He observes, "Several oil & gas equipment stocks remain technically well-positioned." Four issues that he suggests deserve attention are Universal Compression Holdings (NYSE: UCO), Dawson Geophysical (NASDAQ: DWSN), Omni Energy Services (NASDAQ: OMNI) and Bolt Technology (NYSE: BTJ).

He notes, "These companies aren't oil drillers, but instead, provide the equipment or services to facilitate oil and gas exploration. Technically speaking, each has a somewhat different backdrop."

Ashbaugh continues, "However, the one common trait is that each has recently touched multiyear highs on strong volume, while the subsequent consolidation has come on lighter volume. That means the group remains well positioned for further gains."

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