Trading the Refiners, HollyFrontier (HFC) July 25, 2016

It has been awhile since I’ve posted any trades here on the site, but I’m going to get back to it over the next few weeks.

I’ve got one swing trade for today and I have an eye on the refiners. The group looks to be bottoming and oil price seems to be topping out a bit after reaching recent highs. There is some expectation that oil could roll back toward $40.

My favorite pick out of the group is HollyFrontier (HFC) . I’m looking to slide into HFC somewhere around $24 and will be stopping the trade around $23.50, for a risk of $.50. There is fairly strong support on the 20ma around 23.50 for the first point of information. The first target on HFC is $25-25.50, the second target on HFC is $27.00.

The first point of information on HFC is going to be the 50ma sitting in the $25.50 range. Check the volume and see how much resistance there is there. If it looks really thick, take a little off the trade and see if it can break through on the remainder. If it shows strong, then ride the trade for a breakthrough and move to $27.00.

Looking to get at least an average of 4:1 on this one, 6:1 if it can break through the 50ma cleanly.

If this trade stops out at the 23.50 mark, I’ll definitely be watching for another attempt down around 23.00.

Oil and Gas Sector Opportunity, Scans for Monday, August 24

What a brutal selloff in energy names last week. Not a single thing you can do here except go short the XLE and just enjoy the ride down. That was my only play last week, which is the reason for the lack of scans and setups posted. Honestly, there just wasn’t a single thing worth playing long.

Now we go into a new week staring at the entire market falling right off the cliff, so I really doubt much is going to be available on the long side in the energy sector. It is just my opinion, but I think the sector has further to fall and many of these stocks will break down past their prior lows. The current energy stock situation reminds me of the commodity stocks in the 2008 plunge, which just got to ridiculous levels. Those stocks were also some of the quickest to recover and shot straight up once the panic was over for some of the largest gains of the recovery.

At this point, there is nothing to do but see where things bottom, but if you can time this market perfectly in a panic, there will be some monster gains over the next 6 months. Just do the research and stick with quality and sound balance sheets. I’ll be watching the market this week and posting my favorite longer term picks depending on how far things fall, so keep an eye out for that.

 

C&J Energy Services (CJES) – CJES has simply been crushed, which is completely overdone. This is a stock that has simply got caught up in the downdraft to ridiculous proportions. If you look at all the other completion service stocks, you can see this is a group issue, not a stock specific issue. This will be at the top of my list on any big dip and bounce Monday morning.

 

Callon Petroleum (CPE) – When the market is tanking hard, the best way to find a future winner is to look at the stocks that defy the market downdraft and hold tightly in place. Callon fits that description perfectly. Even with the market and sector declining, Callon is holding on to it’s gains off the bottom and still sits within a dollar of the 9 highs.

 

EOG Resources (EOG) – Another idea to keep in mind when making a list of targets in a down market is to stick with quality, and EOG is definitely quality. It is attempting to hold a higher low at 75, but I really doubt this is going to hold. Keep an eye on the retest of the 73 low that was tested twice within the last month.

 

EQT Corp. (EQT) – EQT is a natural gas producer. The natural gas stocks haven’t looked quite as bad as the oil stocks over the last 2-3 days, so maybe they bounce a little quicker and harder. EQT is the only natural gas stock I would trade right now. The chart is very similar to the EOG chart and I’m hoping the higher low at 74 holds, but I’m really expecting a test of the 71 low.

 

Nabors Industries (NBR) – I apologize for the tiny chart, but the pattern I’m really interested in isn’t on the daily level, it is on that 10 line which was touched back in December 2014 and January 2015. The stock is again sitting right on $10 and if it can hold that major support, it could bounce and run higher if the market turns. The best thing about this setup is that there is a definite place to put the stop around 9.75. If 10 fails and it starts running down, the risk is only a quarter, while the upside could be $2 plus.

Good luck out there guys, and keep it safe and honor those stops.

August 13th Oil and Gas Daytrading Setups: Anadarko, Cameron, EQT, Transocean, Patterson-UTI and PBF Energy

Great reversal day in the market and there should be plenty of green tomorrow too, at least we hope. There are some very strong momentum plays and I’ve tried to pick out a play from each of the energy sub-sectors. Here’s what I’ve got for Thursday:

 

Anadarko Petroleum (APC) – Independent E&P, Anadarko, has been forming a nice base over the last couple of weeks and should break back toward the 80.00 level from today’s close of 78.10.

 

Cameron International (CAM) – I’ve had Cameron on the scan list for the last couple of days and will be riding it again tomorrow as it seems to have the most strength in the oil services sector.  It could easily make a continuation move to 54.00.

 

EQT Corp. (EQT) – In the natural gas sub-sector I’m sticking with quality in EQT. It has the best fundamentals of any of the natural gas stocks and that is likely why it is performing the best. A break toward the 80-81 level is very possible on Thursday.

 

PBF Energy (PBF) – In the refining sub-sector, I’ve had PBF on the scan list all week, and it just keeps running. It is my favorite refiner play right now, but MPC, HFC and VLO are all very strong as well. Keep riding the momentum in these names until oil finally shows a bid.

 

Patterson-UTI (PTEN) – In the onshore drilling sector I like HP as the best quality stock, but PTEN has the best trading setup for Thursday. It should break that level at 18 and make a run at the 19-20 range if it can break out. An early entry in the 17.75 range would be ideal for a run at the top.

 

Transocean (RIG) – In the offshore drilling sector, RIG has had a nice five day run which should continue toward the 16 level if the energy sector continues it’s momentum on Thursday. An early profit taking pullback for entry and let it run back toward Wednesday’s close for a breakout.

Oil and Gas Stock Daytrading Setups for Tuesday, August 11

Energy finally got a bid today and just about every stock in the sector was green. PBF and IMO off of yesterday’s scan were big winners and very easy to catch today.

I have no idea if this momentum will carry over to Tuesday, but the one fringe clue that tells me that it will is gold. Gold took out 1100 like it was nothing, and just about every commodity stock followed suit. The commodity advance wasn’t just an oil move.

While just about every pattern in the energy sector put in a solid green candle off the bottom, not all those patterns are tradable. A good trade has a fixed risk and defined stop which produces a reward larger than that stop. The setups below meet these rules and offer low risk, high reward opportunities, without being knife-catch type trades.

 

Tetra Technologies Inc. (TTI) – TTI picked the right day to come out with great earnings, as the stock was up 32%. I think someone knew this was coming, because Thursday was also a big volume upward spike. Daytraders will be all over this one tomorrow, especially given the big day in energy overall. Look for a pullback and try to get long using $6.00 as a guide. Be nimble here, it could be very volatile.

 

Cameron International (CAM) – Cameron climbed back over the 200 day moving average and is probably the strongest stock in the oil services sector. The 200 comes in as support at 50.21, although I don’t think the stock pulls back that far. The play here is to look for some weak open profit taking and grab a good entry playing the stop off the low of the first 30 minutes. There’s a real chance it gaps open and never looks back, so be quick.

 

Callon Petroleum (CPE) – Callon has been on a very strong run and the play here is simply for the momentum to continue. Looking for an entry around 8.00 on some profit taking and a run up toward 9.00. The 7.75-8.00 range should be good support for the stop.

 

Suncor Energy (SU) – SU, CNQ, IMO and CVE are going to stay on the daily scan until they stop trending up. All three Canadian energy companies have been trending up strong and I don’t see any reason that should change Tuesday. The 8 day moving average should be good support around 28.31. I’m looking for an entry around 28.50 in Suncor for a tight 25 cent stop and possibly a run toward $30.00.

 

EQT Corp. (EQT) – The natural gas stocks are due for a big bounce and EQT is the quality pick in this sector. The 21 day moving average provides good support at 75.72 for an entry if the first 30 minutes pulls back from Monday’s 76.69 close. The 8 day moving average comes in at 75.64 for an added bit of support. Look for an entry within 50 cents of the ma’s and see if the stock can make new highs on a bounce.

 

PBF Energy (PBF) – I had this refiner on last night’s scan and it was a big winner. I’ll be playing it again Tuesday for follow through momentum. PSX, TSO, HFC and VLO all make good momentum plays in the refining sector.

 

Helmerich and Payne (HP) – The onshore drillers have been strong for the last two weeks and HP is the quality stock in this area. This stock is another pure momentum play, but the thing to notice here is the danger that might develop for several of the energy stocks. There is a really good chance that the move from 55 to 63 is a bearish flag. Draw a trendline from the low of 55 under the lows through today and be aware that if the stock breaks that trendline, it could sink quickly. Honor stops on these stocks. Even though they look strong, as we have seen over the last year, they can weaken quickly.

Oil and Gas Stock Daytrading Ideas for Monday, August 10

It was another week of pain in the energy sector and it doesn’t look like things are going to get any better anytime soon. My go to play has been a very generic XLE short every day, so I will probably be sticking with that next week. I do have a few long plays below just in case the sector turns upward. It’s always good to have a list of long targets when the tide turns.

 

Gaslog Ltd. (GLOG) – GLOG operates a fleet of 21 LNG ships. While I don’t see much long term future for this stock, it did form a very strong two day candlestick reversal pattern on very high volume, which could point to an oversold bounce higher.  Look for a weak open for an entry and stop it out if it gets too far down into Friday’s candle. This becomes a stronger play depending on where an entry can be obtained. If the entry is low enough, the Friday low of day can safely be used as the stop.

 

Nordic American Tankers (NAT) – NAT operates a fleet of crude oil tankers. It has been on quite a run over the last couple of months and has now pulled back right to the 50 day moving average. I’m looking for a bounce off that 50ma. The stock closed at 14.87 on Friday with the 50ma sitting at 14.70. Look for an entry close the the 50ma and place a stop below the 50ma just far enough to stay out of the noise level. Great reward vs. risk trade.

 

PBF Energy (PBF) – PBF is one of the smaller refiners and it looks poised to break out soon. As the price of oil keeps dropping, the refiners should continue to rise as a group. The 32 level has been tested several times and price should finally get past that level this week. Look for an entry early Monday and stop it at Friday’s low. The 8 day moving average comes in at 30.95, with the 21 day at 30.80. Those two ma’s should provide solid support.

 

Imperial Oil (IMO) – I’ve had the Canadian oil companies on this list for the past week and they all just keep trending higher. SU and CNQ will also be plays, but those two may be due for a small pullback, which wouldn’t be a bad thing for a better trade. IMO sets up nicely with the 21 day moving average at 36.10. The stock closed Friday at 36.45, so look for an entry close to the 21ma and place the stop under the 21ma just outside the noise level.

 

C&J Energy Services (CJES) – This is strictly a knife catching play, but could be a very profitable swing trade if an entry can be had on a capitulation day. This is a great company and the selling here seems way overdone. If it gets under 7, I think it is an opportunity to pick up a solid company at a great price for a longer term swing trade.

 

 

Oil and Gas Stock Daytrading Scans for Thursday, August 6

Another down day on Wednesday, seems like the downward spiral has no end in sight. Oil touching new lows with the dollar gaining strength by the day, not a good combination for energy stocks

 

Clean Energy Fuels Corp. (CLNE) – Once people start realizing that the our domestic natural gas, combined with the toll and processing costs of getting it transported to foreign countries, isn’t going to be wanted or needed abroad, the only use for this stuff other than power plants and homes will be automobiles and trucks here domestically.  CLNE is in the sweet spot to take advantage of that need. It is trying to base here above 5.50. Long any dip and use 5.35 as the stop for a rebound back toward 7.00.

 

California Resources Corp (CRC) – It has touched 4.00 several times over the last couple weeks and seems to be putting in a bottom there. Look for an entry close to 4 and put a stop just outside the noise at 3.90 and look for a move back to 5.00.

 

Frank’s International (FI) – Frank’s got hit hard on earnings Wednesday, but that action led to a beautiful bottoming candle on heavy volume. Look for a weak open for an entry and set the stop at the low of the candle wick from Wednesday. Could close Wednesday’s opening gap.

 

HollyFrontier (HFC) – HollyFrontier has the most momentum of any of the refiners and with the oil price still sinking, the momentum for the refiners should continue. Enter on any weak opening and look for a push to 50.

 

Suncor Energy (SU) – The Canadian energy companies continue to outperform the companies based in the United States. IMO, CNQ and CVE all trending nicely upward. SU is the best of the bunch and could be ready for a breakout toward 30.  Any weak open could be a decent entry with a stop at the week’s low of 27.30.

 

As far as which stocks should be played short, just about all of them. The way I have been playing short is simply to short the XLE and play it safe that way. If you get cute trying to select a single stock to short which you think will outperform to the downside, it inevitably happens that you pick the wrong stock.

Good luck Thursday.

Oil and Gas Stock Daytrading Scans for Monday, August 3

Just when things were looking up for the energy sector, Exxon and Chevron ruin the party with terrible earnings. It’s looking like the early week sector run up was nothing more than a dead cat bounce in a sharp downtrend.  I’m guessing there aren’t going to be many long opportunities this week, so I will be posting some short ideas in addition to the few long ideas I can find. If the sector is going to continue this downtrend, then we might as well make some money off of it.

Here are the best daytrading setups for Monday:

 

Suncor Energy (SU) – Suncor is a great play on it’s own, but one thing I noticed reviewing charts this weekend was that all of the Canadian energy companies followed through on their early week bounce and were not brought down by the Exxon and Chevron earnings.  Suncor is the best of the bunch having closed above the 8, 21 and 50 day moving averages. The 50ma is at 27.78, so I’m playing long off that point for my stop.

 

Imperial Oil (IMO) – Imperial is another Canadian company with a great bounce off the bottom without giving much back on Friday’s downturn. It isn’t above the 50ma yet, but it is within striking distance of that ma which is at 38. Other Canadian companies that might be candidates long are Canadian Natural Resources (CNQ) and Cenovus Energy (CVE).

 

EQT Corp. (EQT) – All of the natural gas stocks are having a difficult time right now, but EQT seems to be rising above the rest of the group. After reviewing the financials of AR, SWN, COG and RRC it is easy to see why investors are moving toward EQT as the preferred natural gas play. While the rest of the group continues to sink to new lows, EQT has been rising, and as you can see from the chart above, could possibly break out to the upside. The formation provides a great fixed risk entry position to try a trade long with a stop on the 21 day moving average at 76.54.

 

Frontline Shipping (FRO) – Frontline operates a fleet of crude oil tankers and has recently been moving up with many other shipping companies. As you can see, it broke out from 3 and has been consolidating between 3 and 3.25 for the last couple of weeks. The trade here is to play it long with a stop on 3.00 hoping for a breakout to the upside of the consolidation zone. There is a chance it breaks down to fill the gap to 2.75, and maybe that is also a good spot to play it, but I’d like it to show more strength and avoid filling the gap and breaking out to the upside past 3.25.

 

Cameron International (CAM) – My long pick out of the oil services sector is CAM. The chart above shows a strong 2 day candle formation on the dip below 50, which could possibly be the low for this stock. 50 is definitely the line if the sand and the play is for an entry close to 50, using the 49.75 level as a tight stop. The 50 level was good resistance earlier in the year and seems to have turned to support around May, with another test in early July. When it finally broke down, it reversed quickly suggesting that there are many buyers looking to get in on any dips below that level.

 

PDC Energy (PDC) – Although you could probably throw a dart and hit a short candidate, PDCE has an advantage in the trade that many stocks don’t have. In the chart above you can see that the 200 day held as good support in March and again early in July before it was broken in mid July. The stock is now retesting the 200 from the underside, and if it fails, it could be a quick fall. The advantage here is that the trade has a fixed risk stop to play off of. Look for a short entry near the 200 ma and place the stop above the 200ma far enough to be outside the noise level.

 

Other Ideas

Enservco Corp. (ENSV) – This is a swing trade candidate. I played this recently from 1.02 to 1.20 and it looks like it may be setting up for a repeat of that move. If it dips under 1.00, it’s probably worth a swing long back to the 1.20-1.30 range in 30 days.

Key Energy Services (KEG) – Key Energy is falling fast and this is strictly a play to catch the bottom for a huge bounce. Watch the volume and if it looks like capitulation, there could be a 20% bounce in the stock.  Very risky trade, so play small.

Valero Energy (VLO) – I’m not sure about the refiners since they have already had a big run, but if oil keeps falling, these stocks will continue to benefit. Valero is back at that breakout point around 64 and has had difficulty getting back above the 8 and 21 day moving averages, which is why I’m a little hesitant on it. If it can get back above those two levels, there may be another leg to the upmove.

Oil and Gas Daytrading Scans for Tuesday, July 28

Another ugly day in the energy sector which provided very little opportunity for the long side traders. Yesterday’s scan picks CAM and EQT were tradable, but RIG, MPC and NFX all ran straight down and never provided an entry point, which was probably a blessing in disguise.

I really like the action in natural gas stocks, specifically EQT, which finished up nearly 2% on solid volume of 3.1 million shares.  It will be on my watchlist tomorrow for more movement upward.

Quite honestly, there isn’t much to trade from the long side tomorrow without a big overall bounce out of the sector, but here are a few ideas:

 

Halliburton (HAL) – Halliburton seems to be basing out here at 40, putting in three tests of that level this month. I’m looking for a weak open on Tuesday to provide an entry point close to 40. If I can get something in the 40.25 -40.50 range, then I’ll risk 50 cents stopping it at 40.00, with the upside of possibly $1.50 if it can take out Monday’s high. Great risk to reward trade on a great company.

 

 

Kinder Morgan (KMI) – Kinder Morgan had a great day on Monday in a very weak market, which shows improved relative strength. Behind that strength may have been rumors of insider purchases. While I’m not sure that was the entire reason, there is no denying that the stock put in a bottoming candle on big volume of nearly 19 million shares. I’m looking for some opening weakness to get a position playing long against Monday’s low for my stop. Looking for follow through back to at least the 8 day moving average around 36, and possibly the 21 day moving average near 37.  Again, this is all about relative strength and finding stocks that are stronger than the overall sector, so that when the sector turns up, these stocks are on the top of our buy list.

 

Phillips 66 (PSX) – I’m a huge fan of playing stocks bouncing off their 200 day moving averages, and as you can see in the above chart, PSX is sitting right on the 200 ma. While this is no guarantee that a stock will go up, what is does provide to a trader is a great spot to put on a very defined fixed risk trade.  When the 200 ma doesn’t hold, you know you are wrong and it is easy to bail out. For PSX, I’ll be looking for a good entry on the open and stopping it if the 200 ma breaks or the stock takes out Monday’s low. Try to work the entry into a situation where the risk is a quarter and the reward is upwards of a dollar.

 

Enservco (ENSV) – Enservco is a very low float stock which has dropped from 1.50 down to near $1.00 in the last couple of weeks on no real volume. I picked up some of this today at $1.02 and intend to hold for the ride back to $1.30-1.50. If it dips again tomorrow, I will add more. This is more of a swing trade than a daytrade. Had the volume on the decline been large, I wouldn’t be trading this, however this seems like a situation where the stock has just been caught in the overall downdraft due more to bids being pulled than actual stock being sold. When the buyers come back, so will the bid and it will move quickly.

 

US Silica (SLCA) and Emerge Energy Services (EMES) – These are two fracking sand companies that have very similar charts, with both putting in green days on Monday. Look for follow through in this particular theme and chose either stock for continued upside.

That’s pretty much all I see for tomorrow that is attractive. About 75% of the oil and gas stocks show the same pattern of a steep decline with either a red candle or a small green doji candle on Monday. This means that the downward momentum has slowed in some stocks, but if you are playing any of those patterns you are trying to catch a falling knife. Be careful out there, these stocks can keep falling.

Difficult Trading In The Energy Sector, Monday’s Daytrading Scans

Sorry for the lack of updates last week, but there just wasn’t much going on from the long side in oil and gas. I spent most of last week trading gold, but hopefully this week energy can get things turned around, or at least get some kind of playable bounce. I’m not really interested in trying to catch falling knives or pick a bottom here, that isn’t my trading style. I’m primarily a long player and trend follower with entry setups that are dip based, so you can see why I haven’t been doing much in the recent week.

If we get a turnaround in energy, here are my favorite targets:

Cameron International (CAM) – Cameron has been relatively strong in the oil services sector and had a solid bounce day on Thursday with a positive earnings report. The oil service names were weak again on Friday, but CAM seemed to consolidate it’s gains up near the top end of that big candle from Thursday and the price could move up from there.  Would like a dip for an entry Monday before lunch and play the stop off of Friday’s low.

 

Marathon Petroleum (MPC) – MPC gapped up a couple weeks ago on the Markwest acquisition and has been drifting lower ever since. It completed filling that gap late last week and also went right down the the 21 day ma where it reversed and put in a nice hammer candle. I’m looking for a dip early and then playing off the bottom of Friday’s hammer as a stop. If there is any momentum here, then it shouldn’t take out Friday’s low, especially with the 21 day ma and the top of that previous gap acting as support.

 

Newfield Exploration (NFX) – Newfield is one of the very few energy names that hasn’t yet broken it’s 200 day moving average. As you can see in the chart above, the stock is sitting right on it and could attempt a rally off that level if the sector shows any strength at all. This is a relative strength play as NFX has been much stronger than the overall sector and should turn quickly if the sector bounces. Looking for an entry around 32.50 and keep the stop fairly close to the 200 ma. If the stock starts to run away from the 200 ma to the downside, then bail out quickly.

 

Transocean (RIG) – I don’t really have much of a reason for believing in RIG, but this trade is more based on the risk/reward number and a very defined stop level. RIG closed at 13.26 on Friday, which is 2 cents below the low back in March. If a double bottom were going to happen, this would be a good spot. Pick an entry and see if this thing can bounce, if it drops too much below that March low, then you can probably cut it without a second thought. Seadrill (SDRL) is showing a very similar pattern. Sometimes trading is simply about the numbers and math, not the stocks.

 

EQT Corp. (EQT) – I wanted to get a natural gas stock on the list because I really think this division will bounce soon.  EQT had a better than expected earnings report on Thursday and got a nice bounce off the bottom with that news. Friday was a weak day in the sector, but EQT consolidated up near the high of Thursday’s candle and could continue upward Monday. I also like Range Resources (RRC) in the natural gas division, but EQT probably has more upside as the good earnings report is still fresh in traders’ minds. Look for a dip Monday and play off Friday’s low for a stop.

Oil and Gas Stock Daytrading Scans for Thursday, July 9

What a complete meltdown out there today. I posted on Twitter early this morning that the scans for Wednesday probably wouldn’t be working very well, and that pretty much turned out to be the case. The only thing from Wednesday’s scans that came anywhere close to working was SSE, which finished green and CHK, which finished down just 1.4%.  With this market, who knows what tomorrow will bring. Feels like most of the opportunities will come from quick scalps to the downside as they develop. On the long side, the best we can do is to make a watchlist and wait and see. Here’s what I have long options for Thursday, but I would recommend looking for short scalps rather than these longs, unless the sector shows strength:

 

Chesapeake Energy (CHK) – I posted a four day chart just so it would be clear that today’s action really wasn’t that bad compared to Tuesday’s move. The big upmove on Tuesday was actually consolidated in a very tight bar, which at least finished higher than it opened. A long trade would’t be a bad risk close to 11 with a reward up near 12 if the sector turned around.

 

Forbes Energy Services (FES) – This is more of a swing play rather than a daytrade. If an entry on FES can be achieved near 1.00, this presents a very attractive reward:risk if your outlook can be stretched to about 30 days.  FES is involved in the well servicing business and has a large fluid logistics division, which is a primary component of fracking. Companies are still going to need to frack the already drilled wells, and many wells are due to be ‘re-fracked’ in the future.  FES’s business is a very basic service that most well operators can’t do without.

 

Contango Oil and Gas (MCF) – This stock pops up on the scan every night. Even on a big down day like Wednesday, MCF just continued to consolidate sideways holding near that 12.00 mark. Very good relative strength to the rest of the sector. It is a lower volume stock, but definitely one to watch if the volume ever picked up. Can even be daytraded if you play the moves between 11.50 and 12.00.

 

MRC Global (MRC) – It isn’t a mistake that certain stocks pop up on the overnight scan several times in a row. Some stocks have a relative strength that is just much higher than the rest of the sector and MRC is one of those stocks. The 15 level continues to be good support and this could be one of the first stocks to go green if the sector can recover. This is a relative strength play.

 

I hate to leave it with just four long plays, but that is just how slim the choices are on the long side. Anything else long is the equivalent of catching a falling knife tomorrow, so if you decide to try it, make sure you have a plan and stay safe.  With 90% of the sector having a big down candle today, the best options for tomorrow will likely be short scalps, the best of which can only really be determined after the stocks open and adjust for the first 30 minutes. I’ve got the Twitter Feed on the homepage, so I’ll post live anything I see that might make a nice short as it develops.