Oil and Gas Stocks Outlook for Wednesday, October 18
Oct 18, 2017 Trading Blog
Not much new to write about today, just a continuation of the existing consolidation that started about three weeks ago. Sector (XOP) still seems to want to rotate between 33.25 and 34.25, with the occasional test of the boundaries around 33.00 and 34.50. Volume on Monday and Tuesday was light with both days around 8 million shares. The only negative I can find with the XOP is that both days failed to close above the 8 day moving average after spending time above it.
XOM still indicating that the next move in the XOP is up. XOM closed Tuesday at 82.96 and stayed above the 8 day moving average. The last close below the 8 day for XOM was way back on August 31. I think it will continue to move to the 84 target. At worst, it will need to hold the 200 day moving average to keep the energy sector uptrend intact.
Outlook for Wednesday: Not much change from Monday’s report, just more consolidation with a small chance that we break to the upside. I’d like to see the XOP make a move below 33.00 to grab all the liquidity down there and kick out the stops. If it does make that move, I’ll be loading up on the long side as price moves back above 33.00. Realistically though, I’m just expecting a smooth move sideways and a slight drift back up to the 34.00 level over the next couple days. The only variable today is the EIA number at 10:30. The API number was a solid draw, so I’m guessing that a build probably won’t happen with the EIA number, but you never know. If the number is bad, I’ll be ready to move in long.
Trading Plan for Wednesday: About the only available trade possibility today is to hope for a bad EIA number at 10:30 and then move in long on the dip under 33.00. I could also make a case for a long attempt at yesterday’s lows, but that might be begging to get my stop picked under 33.00 with everyone else, so I’ll probably pass on a trade at yesterday’s lows and instead wait for the shakeout under 33.00.
Individual Stocks: I still haven’t picked up an swing positions in energy. I’m waiting for that shakeout under 33 to start the next move up. The only stocks that are tempting me to start an early long are EOG, DVN and NBR. The pullbacks in EOG and DVN have been almost perfect and are just waiting to be bought.
I do have a few non-energy swing trades going right now. When volatility disappears in energy, I have to move where the action is. Right now I’m holding GSUM at an average of 8.75, DYSL at an average of 1.44 and P from 7.84. I will be adding to the GSUM position today on any move under 8.50. I’ve got my eye on MYND, FRSX and PRPO today on any significant pullbacks. These are simply my current trades, these are not recommendations, so please research these before you jump in, as most of them are very volatile, low float stocks.