Oil and Gas Stock Daytrading Scans for Thursday, July 9
Jul 8, 2015 Oil Stock Scans
What a complete meltdown out there today. I posted on Twitter early this morning that the scans for Wednesday probably wouldn’t be working very well, and that pretty much turned out to be the case. The only thing from Wednesday’s scans that came anywhere close to working was SSE, which finished green and CHK, which finished down just 1.4%. With this market, who knows what tomorrow will bring. Feels like most of the opportunities will come from quick scalps to the downside as they develop. On the long side, the best we can do is to make a watchlist and wait and see. Here’s what I have long options for Thursday, but I would recommend looking for short scalps rather than these longs, unless the sector shows strength:
Chesapeake Energy (CHK) – I posted a four day chart just so it would be clear that today’s action really wasn’t that bad compared to Tuesday’s move. The big upmove on Tuesday was actually consolidated in a very tight bar, which at least finished higher than it opened. A long trade would’t be a bad risk close to 11 with a reward up near 12 if the sector turned around.
Forbes Energy Services (FES) – This is more of a swing play rather than a daytrade. If an entry on FES can be achieved near 1.00, this presents a very attractive reward:risk if your outlook can be stretched to about 30 days. FES is involved in the well servicing business and has a large fluid logistics division, which is a primary component of fracking. Companies are still going to need to frack the already drilled wells, and many wells are due to be ‘re-fracked’ in the future. FES’s business is a very basic service that most well operators can’t do without.
Contango Oil and Gas (MCF) – This stock pops up on the scan every night. Even on a big down day like Wednesday, MCF just continued to consolidate sideways holding near that 12.00 mark. Very good relative strength to the rest of the sector. It is a lower volume stock, but definitely one to watch if the volume ever picked up. Can even be daytraded if you play the moves between 11.50 and 12.00.
MRC Global (MRC) – It isn’t a mistake that certain stocks pop up on the overnight scan several times in a row. Some stocks have a relative strength that is just much higher than the rest of the sector and MRC is one of those stocks. The 15 level continues to be good support and this could be one of the first stocks to go green if the sector can recover. This is a relative strength play.
I hate to leave it with just four long plays, but that is just how slim the choices are on the long side. Anything else long is the equivalent of catching a falling knife tomorrow, so if you decide to try it, make sure you have a plan and stay safe. With 90% of the sector having a big down candle today, the best options for tomorrow will likely be short scalps, the best of which can only really be determined after the stocks open and adjust for the first 30 minutes. I’ve got the Twitter Feed on the homepage, so I’ll post live anything I see that might make a nice short as it develops.