Are Oil stocks ready?

[Tape Trader]

Should I buy?

Every evening I scan through charts within sectors of the market. I write down stocks on a list for the next day that are “setting up” and/or could be potential trades.

Recently, I’ve found that Oil stocks have been coming up on my list.

Here is a chart of the broad ASX300 Energy sector:

https://postimg.org/image/66zf8cmwf/

As you can see the index has been going sideways since late April.

It now appears to have broken out of this range (on heavy volume).

Stocks in sector that I am watching:

(Click on code for chart)

1. AWE
2. BRU
3. OEL
4. ORG
5. OSH
6. STO
7. SXY
8. WPL
9. XST

These are the best ones I can find.

After the strong run up in Oil stocks between Jan-Apr 16- they based for 3 months.

The big caps (AWE, ORG, OSH, STO, WPL) look like they could breakout soon.

If we look at Spot Oil you will see it’s in a downtrend.

https://postimg.org/image/5xx94okq7/

In my experience stocks generally start to move before the spot price of a commodity moves.

I’m not too worried that spot price is currently in downtrend, unless we get prices below $44 and the 200day MA.

Let’s look at the Positives & Negatives for a move in Oil stocks:

Positives

• Oil stocks are holding up and looking to breakout (when Spot Oil is in a downtrend)
• There’s still a lot of bearishness around Oil, we haven’t seen the hysteria from investors that Gold has produced.
• The broader ASX300 Energy chart looks to have broken out of its 3 month range on heavy volume.

Negatives

• Spot Oil is in a downtrend- this could hold Oil stocks down.
• The recovery in Oil stocks has been “V” shaped. There will be quite a lot of people who brought Oil stocks a lot higher & will want to sell on moves higher.

Conclusion

• I always like to look at both positives and negatives. It gives you a less biased view.
• There’s always doubt in my mind & whenever I am not sure about a trading idea I always say “just follow price”.
• So if Oil stocks can breakout and sustain those breakouts, I will “just follow price” and trade them.

What do you think? Are there any other Oil stocks you know that look good?

 

[History Repeats]

CVN, the only oil stock showing up on my scan with some decent momentum. Also looks about to breakout. Only problem dollar value turnover pretty low. I don't own the stock.

 

[Tape Trader]

CVN, the only oil stock showing up on my scan with some decent momentum. Also looks about to breakout. Only problem dollar value turnover pretty low. I don't own the stock.

CVN Chart looks good.

I'm still seeing oil stocks holding up while Oil makes new lows.

Is it that stocks are slow to react? Or are they telling us something else?

Interesting.....

 

[pixel]

CVN Chart looks good.

I'm still seeing oil stocks holding up while Oil makes new lows.

Is it that stocks are slow to react? Or are they telling us something else?

Interesting.....

I am less Bullish on CVN in particular. Have posted my chart interpretation under CVN.

I also remain cautious about oil stocks in general. Regardless how loudly the Climate Change deniers are squawking, the debate has had some major effects on people;s thinking:
Less energy is wasted.
The trend towards Solar and other renewables has now reached critical mass and is irreversible.
China and India ramp up Nuclear power; Japan restarts her reactors.

All of those initiatives have shifted, and will IMHO continue to shift, the balance to decreasing demand for oil as a commodity. Currently diverging share prices may easily be the result of some big funds manipulating prices upwards in order to reduce their exposure at a better price.

 

[Smurf1976]

Less energy is wasted.
The trend towards Solar and other renewables has now reached critical mass and is irreversible.
China and India ramp up Nuclear power; Japan restarts her reactors.

Nuclear power in Japan reduces oil consumption to some extent but the others are largely alternatives to coal and gas, not oil.

 

[Tape Trader]

Good insights....

Crude is below $44 and the 200 day line now.

Previously mentioned AWE, SXY, WPL, OEL, XST are holding up well.....

OSH, STO, BRU, ORG seem to be rolling over with Crude...

Now lets see what happens

Happy Trading

 

[Tape Trader]

Good insights....

Crude is below $44 and the 200 day line now.

Previously mentioned AWE, SXY, WPL, OEL, XST are holding up well.....

OSH, STO, BRU, ORG seem to be rolling over with Crude...

Now lets see what happens

Happy Trading

Crude still in a downtrend...

Most of the stocks that were setting up are rolling over in their consolidation patterns too.

The ASX300 Energy sector looks to have been a false breakout

Will still keep my eye on this..

Cheers!

 

[Tape Trader]

Crude still in a downtrend...

Most of the stocks that were setting up are rolling over in their consolidation patterns too.

The ASX300 Energy sector looks to have been a false breakout

Will still keep my eye on this..

Cheers!

Some decent price action in Crude last few days. Might have found a bottom here.

Just need stocks to setup and breakout !