Oil and Gas Stocks Outlook for Monday, October 9
Oct 8, 2017 Trading Blog
A week away from the market was much needed and was a great opportunity to clear up some mistakes that have been slowly creeping into my trading. I can tell when I get burned out as my record keeping gets sloppy and my trading moves to ever shorter timeframes. With the chance to step back, it is clear that I’ve been doing too much daytrading and not enough swing trading. I missed some great moves over the last six weeks being too risk averse, too precise and too impatient. It is time to even things out and get back to a roughly 50/50 split on the swing and intraday trading.
I am 100% cash right now. I will be creating a tab at the top of the site to list my current swing positions as I take them.
I updated my average daily volume on the XOP over the last 10 weeks and here are the up to date cumulative volume numbers for each 30 minute segment of the day (does not contain pre-market or after hours volume, or volume from 10:30-11:00 on Wednesday):
10:00 1509
10:30 2857
11:00 3885
11:30 4857
12:00 5867
12:30 6480
1:00 7059
1:30 7750
2:00 8315
2:30 9012
3:00 9642
3:30 10433
4:00 12674
Outlook for Monday: It has been a huge run for the XOP over the last six weeks and a definite change of character from the run down from December. It now looks like it might be time to consolidate for just a bit, with possibly a pullback soon. The XOP closed under the 8 day moving average on Friday for the first time since September 11, and for only the second time since August 29. The first test Monday will be to see if it can reclaim the 8 day at 33.92. If it makes a run at that level and clearly fails, then we could be headed toward the 50 day moving average which currently sits at 32.23. The most important level on the way to the 50 ma will be the 33.00 level. Depending on how quickly the index drifts down, the 50 day moving average could possibly work its way up to 33.00 and meet price there, which would make a very strong support level for the XOP. If I had to place odds on a pullback to at least the 50 ma this week, I’d say about 65% we touch it.
On the upside, the 200 day moving average is sitting just overhead at 35.03. The one thing that has been interesting over the last couple weeks has been XOM. It has been fighting its 200 day ma (81.90) for the last seven trading sessions and closed just under it Friday at 81.71. I’d really like to see XOM break strong above that 200 ma to signal a new leg up for the XOP. The XOP gave up its 8 day moving average on Friday, however XOM held above its 8 day ma, and hasn’t had a close below it since August 30, which signals that the uptrend is strong and still in effect.
Trading Plan for Monday: I’m still a little out of the market flow from missing last week, so I will probably take the morning and just watch to get back into it. I’d really like to see an early dip or gap down and then a run up to test the 8 day ma at 33.92. The signal that is obtained on that 8 day ma test will go along way toward developing my trade plan for the rest of the week. On the downside, I’ll be watching 33.25 (last week’s low) and 33.00 (the gap from two Mondays ago) to see what kind of demand is under this market.
Individual Stocks: One stock that has an interesting technical setup is LPI. I will be watching this one for a long this week. It is currently sitting right between the 50 and 200 day moving averages, with the 8 day also squeezed in between. I’m looking long off the 50 ma with a stop at last week’s low of 11.90.