Oil and Gas Stocks Outlook for Tuesday, September 12
Sep 11, 2017 Trading Blog
Good volume on Monday, just no real tradable range. Only 50 cents between high and low, and most of that was in the first 30 minutes. From 11:30 to 4:00, the range was less than 30 cents. The XOP just isn’t tradable intraday. I’m getting really tired of writing that day after day.
As for direction, the SPY is hitting all time highs again and the XOP can barely get off the floor. We are still stuck near 52 week lows with no real indication of things turning around. If we could just get a week of high volume up days then maybe this thing could get some legs, but until then I think we just wander sideways trying to build some type of base for a recovery that might come in the fourth quarter or maybe Q1 of 2018.
Outlook for Tuesday: I’m looking for a gap up and then just a small narrow range of accumulation the rest of the day. That has been the pattern over the last couple weeks and I don’t see much reason that it would change tomorrow. At the end of the day, the overall numbers will look good, but most of the increase will be the gap up (or a quick sprint up in the first 30 minutes) while most of the trading is done in a very tiny untradable range, much like today.
Trading Plan for Tuesday: About the only thing that is possible Tuesday is to catch a quick down move first thing after the open and just ride the move back up. Buying gaps up isn’t my thing, as the extended odds just aren’t what I’m looking for. Somewhere in the 30.00-30.10 area might be worth taking a shot long with a stop against 29.90. My guess is we gap up though, so the chances of getting this trade are small. If you decide to buy into the gap up, remember we have ranges stacked overhead that will present quite a bit of resistance. There is one from 30.45-30.65 and one from 30.80-31.00. After that we have the 50 day moving average and the high from last week. Just so much overhead resistance that buying the gap up is just too risky. Too much risk, not enough reward. If I don’t get the quick move down on the open, I’m probably going to be peeking in on some other sectors starting tomorrow. My trading has just hit a wall with energy. I barely had any trades last week and none Monday. I’m still holding the longs from the Friday lows in PE, RSPP, RRC and NFX. I love the energy sector, but sometimes you have to go where the money is, which may mean trading other sectors until things get sorted out in energy.