The Dow Jones U.S. Exploration & Production Index ($DJUSOS) is 39% higher since its January low and two mid-cap stocks that are outperforming include $4 billion QEP Resources (QEP) and $2.9 billion WPX Energy (WPX). They have both been overbought recently and now have printed negative divergences, but their relative strength, along with solid SCTRs suggest they could be bought on pullbacks. Both charts are similar, so let's focus on one example - QEP:
The pink arrows are typically what I look for in terms of retracement after a negative divergence prints. An upcoming 50 day SMA test would be worth considering for entry.
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is the Chief Market Strategist of EarningsBeats.com
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