Oil and Gas Stocks Outlook for Friday, September 8
Sep 8, 2017 Trading Blog
It’s going to be a short report today. Absolutely terrible XOP trading conditions the last couple days, with most of the day just sitting in a tight range. I have had two trading opportunities this week, which is very rare, most weeks have 10-15 trades. Thursday had a couple tradable moves, from the open until about 10 am and then from 12 to 1. I wasn’t in favor of shorting this market, so I missed the first move and the second move just didn’t have much reward available on the long side due to the Wednesday range sitting just overhead. In fact, that is what happened, price broke 30.65 only to run right into a wall at 30.80. That was a very small reward and there was at least that much risk in the trade. I like to get at least 2:1 on my money and it just wasn’t there Thursday.
As for today, I don’t see anything changing. I’ll probably be done by 10:30 for an early weekend.
Outlook for Friday: Flat. Likely ranging between 30.45 and 31.00. I think traders will give it a quick look in the first hour and then pack it in to go watch the hurricane. Expecting a 7-9 million share day. I don’t think too many are going to want to take a position over the weekend with these storms out there. Nobody wants a Harvey repeat and many will be satisfied just sitting this one out.
Buyers are still in control of the market and every dip is being accumulated, so going short isn’t really an option. Thursday was fairly constructive with price dropping down right to the 8 day moving average and then bouncing to form a nice hammer type candlestick closing just below the 50 day moving average. That pattern suggests continuation of the up move. Once again, there were no sellers to be found in the afternoon and buyers could push it as far up as they wanted. Today I see the market opening likely flat, dropping to test that 30.45-30.65 range and then probably creeping up toward 31 the rest of the day. If we run into the continuing afternoon situation where there is just no supply overhead, there is a small chance we could test that 50 day moving average again and then settle into the 31.00-31.25 range for the afternoon. It really all depends on how aggressive the buyers want to be since they are the group in charge.
Trading Plan for Friday: This is going to have to dip early for me to be interested. If we can get a dip to the bottom of Wednesday’s range around 30.45, I might be interested in taking a quick shot long. I’m not interested in shorting today. I would be even more interested in trying a long if the SPY is red and taking the entire market down. We got that situation on Wednesday and it provided a nice entry point for XOP. Good luck today, and keep safe if you are in the path of the storm.