Oil and Gas Stocks Outlook for Thursday, September 7
Sep 7, 2017 Trading Blog
It was a very flat day for the XOP on Wednesday and offered nothing for us daytraders. We got the first hour ramp up of about 50 cents and then it just sat in a 20 cent range for the next 5.5 hours. It was very similar to the pattern we got last Thursday.
Not exactly sure what was going on yesterday, but it looked like a simple drive to the 50 day moving average and then just a sit for accumulation at that point, not wanting to push things out of control. Much like the last couple of weeks, there were just no sellers to be found. I get the feeling that if buyers really wanted to push this market, they could probably rip it another 5-7%. The next point to test is the 31.25 area. I really thought we would get a big gap up on Thursday, but so far this morning that doesn’t appear to be the case.
The biggest event of the day will be the EIA report at 11:00 am Thursday. There will probably be some hesitation this morning ahead of that report, and I’m not sure that I would want to be long ahead of it. No clue what this is going to show, but I do think there will be some good volatility around the report.
Outlook for Thursday: I feel like we could get some type of negative shock on the EIA report which might send us down for a bit, but it will probably bounce right back. If the report is good, then I think we test that 31.25 area. The next level after that is 31.83. There are still too many buyers willing to accumulate every dip and no sellers in this market, which should continue to produce an upward grind. Until I see sellers, the play has to be long.
Trading Plan for Thursday: I’m hoping for a bad EIA number and a spike down to find a spot to play long today for a bounce back. If the EIA report doesn’t produce a move down and/or sellers don’t show up today, then I expect that it will be another day that isn’t tradable. As for how far it could spike down, I’ve got the 8 day moving average down at 30.22, which is very close to Tuesday’s 30.15 low. That would be a very high odds place to get long working against a stop of 29.88.