Trade Setups for January 17 (MPC, TSO, NOV, BHI, WMT, SIG)
Jan 16, 2017 Trading Blog
It looks like OPEC is now hinting that that will not renew their production cut which is expected to expire in July. I’m not even sure if they are really cutting at all currently, especially given their “honor system” and self reporting. Oil may see a short term drop, which might give the refiners a boost.
The group consists of PSX, MPC, VLO, HFC, TSO and PBF. At this point MPC and TSO are my two favorite long opportunities. I know things have been trending straight down on these, but this could be the week when things turn around, as several of these stocks are approaching strong demand levels. Be careful with these trades, as they are very close to being ‘bottom picking” type of trades.
TSO will likely be my preferred play Tuesday. The price level to watch is that 80 line that has formed over the last 6 months. The 200MA is also sitting right there near Friday’s close. I will be looking for a quick drop Tuesday morning and then looking for it to hit bottom for a long, jumping back quickly over the 200ma and that 80 level. I’m looking for the initial entry near the 79.10 low of Friday and scaling in as it climbs past the 200 and the 80 level.
I will also be looking long on MPC on the open Tuesday with the same exact play. I’m looking for a test of last week’s lows and then some basing for a reversal. MPC is also sitting right on the 50MA for added support. When price re-enters last weeks range, pull the trigger long with a stop below the Tuesday morning lows.
I’m less excited about trying this play with VLO, PBF, PSX, but might give it a look with HFC.
If the refiners don’t pan out with a trade, my next look will be toward BHI and NOV for similar trades. My favorite is probably the NOV setup. Price bounced off the 50MA a couple weeks ago making a low of 37.19, which seemed to be a support level which previously acted as resistance back in October. I’d like to see price take that 37.19 level out picking the stops down there and then bounce. The entry trigger is a move back inside the 37.19 level, with an add on a cross of the 50MA at 37.43.
BHI gave up that 50MA on Friday and could be a nice play off the Friday lows for a long. Let it drop on the open, gauge the pressure on the down move and then pull the trigger when price re-enters above last week’s low.
If none of the energy plays set up, I’ll be looking toward WMT and SIG for plays off of Friday’s lows. As with the trades above, let them open, drop and hit some demand and then start to climb. The entry trigger is when price re-enters above Friday’s lows. The stop is placed at the Tuesday morning low.