What’s up with bubblin’ crude? Don’t do the Jed Clampett trade yet. (August 14, 2014)
I want to look at Nabors (NYSE:NBR ) today. This is a stock that had been a really solid performer here during the uptrend, but that got broken back at the end of July on heavy volume; since then the stock has been moving lower. Look, I can probably draw a head and shoulder pattern here if I want to, but all I really care about is this trendline; nice trend channel here, the stock had been begun drifting sideways, now it’s broken.
You can look at this and say, “Well it’s a higher low.” Well that’s fine, but it’s probably not done going down; it may bounce off of this level, but do you really want to buy this thing now? I don’t, and even if I do, which I don’t, where am I going to sell, I’m expecting resistance, maybe $1.00 or $1.50 overhead, so this is not a good risk reward.
So what’s happening? This is what’s happening, oil is absolutely taking in on the chin here. You’ve got a breakdown below the 200-day moving average here in oil and that is going to drive these stocks down. Look at Weatherford ( NYSE:WFT ), the same thing, this is ugly; Schlumberger ( NYSE:SLB ), drives it down; Halliburton ( NYSE:HAL ), I mean pick them, they’re all down in the oil and gas, only the refiners are up.
On this kind of stuff all I’m saying is, don’t look at this as a buying opportunity, it may very well be, but I’m sure not seeing it now. So just steer clear of this stuff, let these stock come in and focus on the stuff that is working, this would not be in that group.
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