Oil and Gas Stocks Outlook for Thursday, September 28
Sep 28, 2017 Trading Blog
It was another great day in the continuation of the XOP uptrend. Price dropped within 6 cents of Tuesday’s low, which made for a great entry with a tight stop and a ride back to the highs. Volume was solid at 15 million shares and the range was a very tradable 75 cents.
Yesterday’s candlestick was just what you want to see in an uptrend, a long lower wick which reversed and closed at the highs of the day. The bears took their shot and they missed. There still just aren’t any sellers anywhere around. Today should be another green day, with price making a run at that 34.85 – 35.36 range I set out yesterday.
Outlook for Thursday: I’m expecting a small chance that we may get a move down to test the lows of yesterday’s candlestick tail, which would be a great place to put on a long trade with a tight stop just under yesterday’s lows. More than likely though, we are probably looking at just a minor pullback and more price discovery above yesterday’s highs. Like I’ve been saying for weeks, this thing isn’t going to stop until it finds some supply overhead, and so far there doesn’t appear to be any in sight. The next location where it may appear is up around the 200 day moving average at 35.32.
Trading Plan for Thursday: Same simple plan, buy the dip and ride to new highs. No shorting today. If I had to pick a spot for a pullback trade, I’d go long with a 34.06 entry. Use 34.00 as the mental stop and see how it handles that mark. If 34 looks weak on the test, then be ready to bail out of the trade. If the market gaps up, we could get a repeat of yesterday’s action where the trade doesn’t set up until later in the morning. The reversal yesterday was easy to spot, and it happened at a very logical place which was the prior day’s low.
Individual Stocks: PE has been very weak the past couple days. It has been one of my favorites and I will be watching that one to put in some kind of bottom soon for a long attempt. XOM still looking good with a solid day on Wednesday up +.7% at 81.55. I have the 200 day moving average coming in at 82.22 and that will be the spot where the sector makes a decision. It is looking like XOP and XOM may both hit their 200 ma’s at the same time, which should make the signals very clear.