Oil and Gas Stocks Outlook for Wednesday, December 13
Dec 13, 2017 Trading Blog
The XOP made a nice move out of the gate on Monday morning, but it has been fading fast since testing the 36 level around 11 am Monday. We are stuck right on the midline of the mildly upsloping channel that started back on October 15. The current range is 34.50 to 36.00, with Tuesday’s close right in the middle at 35.18. The 8 day moving average is at 35.38, the 21 day ma at 35.20 and the 50 day ma at 34.55.
On Wednesday, we either hold Tuesday’s low of 35.09 or we are probably looking at a test of the 50 day moving average down around 34.50. API numbers Tuesday afternoon were good, so the crowd is likely expecting good EIA numbers at 10:30 today. If we get a negative surprise, the odds increase that we will make a dip down to 34.50. There seems to be very solid support there, so I don’t really see the market taking out 34.50. If it does, the next barrier on the downside is 33.85.
Trading Plan for Wednesday: I’m really hoping for a dip down to 34.50 or lower today. I will be taking a long position at that level. I would like to wait until after the EIA number to get in, but if we dip that far prior to 10:30, I’ll go ahead and get long. The ideal long setup would be a negative surprise on the EIA number with a quick spike down for an entry long.
Individual Stocks: I took a small starter long in OAS yesterday morning at 8.95. I was planning on adding at 8.50, but passed on it, as the stock just didn’t look good at all. From everything I read, there seems to be quite a bit of disappointment in management and this one might take longer than I like to recover. I’ll hold the starter position, but probably cut it into any move up near 8.75 and take the small loss.
If we do get that dip today in XOP, I’ll be watching APA and EOG for entries long on swing trades. I think APA could see significant downside if the index starts to slide under 34.50 and I’m willing to jump in near 39. EQT had a production update today, so that stock could also see some movement for a quick intraday trade.
CVX is sitting right on the 8 day ma and sets up nicely for a daytrade using 119 as a stop. I’ll give that one a shot if price gets me near that stop level for a good risk/reward.
HES, PE and NFX also set up well for swing trades with the 8, 21 and 50 day moving averages all within about 40 cents of each other. As long as price can hold the 50 day ma, I think these make great risk/reward long trades. HES and NFX also have the 200 day moving average in that grouping of ma’s.