Difficult Trading In The Energy Sector, Monday’s Daytrading Scans
Jul 26, 2015 Oil Stock Scans
Sorry for the lack of updates last week, but there just wasn’t much going on from the long side in oil and gas. I spent most of last week trading gold, but hopefully this week energy can get things turned around, or at least get some kind of playable bounce. I’m not really interested in trying to catch falling knives or pick a bottom here, that isn’t my trading style. I’m primarily a long player and trend follower with entry setups that are dip based, so you can see why I haven’t been doing much in the recent week.
If we get a turnaround in energy, here are my favorite targets:
Cameron International (CAM) – Cameron has been relatively strong in the oil services sector and had a solid bounce day on Thursday with a positive earnings report. The oil service names were weak again on Friday, but CAM seemed to consolidate it’s gains up near the top end of that big candle from Thursday and the price could move up from there. Would like a dip for an entry Monday before lunch and play the stop off of Friday’s low.
Marathon Petroleum (MPC) – MPC gapped up a couple weeks ago on the Markwest acquisition and has been drifting lower ever since. It completed filling that gap late last week and also went right down the the 21 day ma where it reversed and put in a nice hammer candle. I’m looking for a dip early and then playing off the bottom of Friday’s hammer as a stop. If there is any momentum here, then it shouldn’t take out Friday’s low, especially with the 21 day ma and the top of that previous gap acting as support.
Newfield Exploration (NFX) – Newfield is one of the very few energy names that hasn’t yet broken it’s 200 day moving average. As you can see in the chart above, the stock is sitting right on it and could attempt a rally off that level if the sector shows any strength at all. This is a relative strength play as NFX has been much stronger than the overall sector and should turn quickly if the sector bounces. Looking for an entry around 32.50 and keep the stop fairly close to the 200 ma. If the stock starts to run away from the 200 ma to the downside, then bail out quickly.
Transocean (RIG) – I don’t really have much of a reason for believing in RIG, but this trade is more based on the risk/reward number and a very defined stop level. RIG closed at 13.26 on Friday, which is 2 cents below the low back in March. If a double bottom were going to happen, this would be a good spot. Pick an entry and see if this thing can bounce, if it drops too much below that March low, then you can probably cut it without a second thought. Seadrill (SDRL) is showing a very similar pattern. Sometimes trading is simply about the numbers and math, not the stocks.
EQT Corp. (EQT) – I wanted to get a natural gas stock on the list because I really think this division will bounce soon. EQT had a better than expected earnings report on Thursday and got a nice bounce off the bottom with that news. Friday was a weak day in the sector, but EQT consolidated up near the high of Thursday’s candle and could continue upward Monday. I also like Range Resources (RRC) in the natural gas division, but EQT probably has more upside as the good earnings report is still fresh in traders’ minds. Look for a dip Monday and play off Friday’s low for a stop.
Tags: Trade Scans