Oil and Gas Stocks Outlook for Monday, November 13
Nov 13, 2017 Trading Blog
It was a difficult week of trading for the XOP with the only decent moves up coming on Monday and Thursday. I missed trading on Friday, but from review it appears the market made a fake to the upside failing at Tuesday’s highs only to fade and end up right where it opened. That wasn’t such a bad thing, just more consolidation for what may be a break to the upside this week.
The XOP gave the 8 day moving average a test on Thursday and bounced easily. I expect we might get another test of it today or early tomorrow down around 35.80, but I think it holds and we go up from here. I am looking for a the index to stay in the 35.50 to 37.50 range this week, with maybe a quick look at 38.
After taking some time off Friday, (yes, I lost in Monopoly to the queen of Monopoly) the realization hit that I am going to have to broaden out more trading to individual stocks. The XOP index just isn’t providing enough opportunities on most days, and I expect that will be more true as we consolidate sideways as this advance matures into a flatter, smoother uptrend.
My normal 25 stock list:
Integrated: XOM, CVX, BP
E&P: APA, APC, CLR, CNQ, COP, DVN, EOG, HES, NBL, NFX, PE, RSPP.
Natural Gas: COG, EQT, RRC
Services: SLB, HAL, NOV, HP
Refiners: VLO, MPC, PSX
I’m going to start planning and posting some trades in these individual stock names, as I have been a little lazy in just leaning on the XOP for trade ideas.
Outlook for Monday: I think we might get a dip Monday morning to test the lows of last week. I am looking for a dip around 35.50-35.75 range just to see what is down there for support. The 8ma also also prints right in that area, so any breakdown of that ma might lead to further downside. I want to see a quick test on light volume and then jump back up above it very quickly and grind back up past R/G and then be on the way up late Monday, early Tuesday. If the index can’t recover the 8ma very quickly, I could see the downside being around 35, which was where we saw a bit of consolidation before last week’s breakout. At the very worst, we have the 50 and 200 ma offering support in the 34.25 area. That point is also about 50% of the latest run up which started in late September. Any move and test down there would be a gift to anyone wanting to build a large long position.
Trading Plan for Monday: I will be looking long all day on Monday. The ideal setup would be an early quick dip to last week’s lows for a long entry. Second opportunity would be a test of Friday’s lows for a long entry or add. Once price bounces past R/G, it should head for the highs and 37. I have no idea what is up there around 37, but it would be nice to get a test to see what kind of supply is there. If we do breakdown early this week, I would still be looking long around the 35 area for another trade. That 35 area falls on the 38.1% retracement of the run that started in late September.