Commodities Countdown

Oil Producers And Oil Services Setups


With oil posturing to hold $55, there is lots of anticipation that oil will fail here. While the stocks can fall from here, there are a lot of nice setups should a round of optimism move towards oil companies. This article is laying out some of the setups.

Diamondback Energy (FANG). The SCTR is rubbing the 75 level. The relative strength is in a small uptrend off the August lows. While some consolidation here is ok, this stock looks well positioned to breakout. 

RPC, Inc. This mid-cap is consolidating after breaking through $22. The SCTR is above 75, showing relative outperformance. The MACD is trying to turn up, right near zero. The volume improved to 1 Million shares on the final day of November, but still about 20% shy of the average. Is this a head/shoulders set up to break lower? Or is this just a loose consolidation above support? Either way, the chart sets up nicely with a close stop if it wants to move higher.

Helmerich and Payne (HP). The SCTR is trying to rally. The relative strength is pushing up since September. Price action is interesting. The six month head/shoulders base measures to $72.50. The above average volume along with a MACD turning up is a nice signal on the move. Support at $57.00 is a great place to place a stop.

Patterson - UTI Energy (PTEN) had a nice move to close November. The break above $21 looks solid. With the volume 25% above average on the breakout, this looks great here. That little turn up on the MACD looks great.

Holly Energy Partners (HEP). This stock isn't doing much, but it is close to the highs at $35.00.  While the price action is working higher lows and a flat top, which is called an ascending base. 

Dril Quip (DRL) made a move above horizontal resistance to close November. The SCTR moving above 30 is a good place for me to look for base breakouts. 

While the market seems to be pausing with the high flyers of the NASDAQ 100, a rotation into value just might move these stocks to the fore. You can click on these charts in the future to see the update as they roll.

Good trading,
Greg Schnell, CMT, MFTA.

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. Based in Calgary, he is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is also the author of Stock Charts for Dummies (Wiley, 2018). Learn More
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