Looking for a high energy trade? Check out some of these energy stocks! (November 17, 2017)
XOP CRZO SWN CRC SM COG
I want to talk today about some of these energy stocks. I have been staying away from these for awhile because they have been going down and I don’t like to be shorting stocks when there so many stocks to be buying; it’s easier to make money on the long side than the short side. And so I have been watching these, waiting for them to turn around, maybe give us a little bit better idea of what is happening and finally I am getting the nice warm fuzzies here.
This is why: If we just look at the XOP ( NYSEARCA:XOP ) we see a breakout and a pullback to the 50-day moving average, which now is trending higher as opposed to lower like it was. So we have the got the 50-day moving average, which is trending higher. The stock pulls back, bounces, busts right through the 200-day moving average, right? So it breaks right through the 200-day moving average, pulls back and now it is bouncing off of this, which, by the way, is right about the time that the 50 is going to cross the 200. And in probably about another week or so, maybe a little bit more because this stuff moves slow, this 200-day moving average that is trending down, is going to start going flat and then start to move up. And when it does that, that is a really bullish sign. That is when I start to get excited about stuff. We look at this right now and you can see what is happening; squeeze, breakout, pullback, not really a squeeze here but it tightened a little bit, breakout, pullback, bounce.
Now I am looking at other stocks, you can buy the ETF and that is great but let’s look at a few stocks. Okay, Carrizo ( NASDAQ:CRZO ), a similar type of situation. You are going to see this. When you see an ETF doing a certain thing it is a by-product of various components in the ETF doing that certain thing. Here, it is below the 200-day moving average but you can see it is the same zigzag here. What you are doing is, if you are in this stock then you are trading it very technically. You can keep a stop, a really, really tight stop because you are trading the turn. You are trading that right there. So if the stock doesn’t keep going and instead pulls back you don’t want to be long the stock. Keep a stop right underneath 18.00 and you are very precise then in your entry. If the stock works for you are going to make money. If it doesn’t you are not going to lose very much. Big difference.
Southwest Energy ( NYSE:SWN ) is giving you the same type of thing; a rebound off of 6.00. Now look for a breakout above the 200-day moving average. No matter where you are buying your stop should be below $6.00.
And then California Resources ( NYSE:CRC ). A nice breakout out from a squeeze. This is looking particularly bullish, frankly, 40 percent of the float is short right here. You have got 13 days of trading for all the shorts to cover. So this looks like a short squeeze in the making. You are long this stock here, you have got a stop just a little bit under there. You are long the stock now and then if the stock starts breaking to a new high on this little cluster here, then you are buying more and you are off to the races. You look for the stock to hit about $20.00 or so. Seriously, that is how I would be trading this stock.
Okay, just a few more. SM Energy ( NYSE:SM ). A breakout above the 200, a pullback and then we are getting the same type of thing. The 50 is just about ready to cross over. Very technical move. Keep your stop just a little bit below 19.00 and that should get it done for you.
And then finally, Cabot Oil ( NYSE:COG ). A little different because this is up at a new high so it is a different type of trade. Buy it at 29.39 and just ride it up. Because you are late on the entry but by the way, the sector is going this is a stock that is probably going to walk you higher. And on this with respect to a stop, I would keep a stop just a little bit below Wednesday’s intraday low, say in the mid 27.00s, something like that.
So these are 6 charts that should be money makers for you; I hope it helps.
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