Updates on 5 Energy Names After Dramatic Crude Oil Price Change

Phillips 66

Thanks to the dramatic but brief pullback in crude oil prices, we were able to purchase shares of EOG Resources (EOG) . We laid out our game plan to buy the stock in the $138 to $140 area on Wednesday morning. EOG Resources was trading near $138 by that afternoon.

From there, EOG bounced sharply as oil prices reversed higher after President Trump’s speech on Wednesday evening. EOG touched $147 on Thursday, before retreating to close near $142.

Trump’s speech disappointed markets, which were already pricing in an end to the military action in the Middle East. The fact that Trump didn’t back off on Wednesday came as no surprise to those who read this article on Tuesday.

Devon Energy, Occidental Petroleum, ConocoPhillips and Phillips 66

I’m patiently waiting for ConocoPhillips (COP)  and Phillip 66 (PSX) , but those names didn’t reach their respective entry points, which can be found here. In addition, I’ve been asked for my opinion on Devon Energy (DVN)  and Occidental Petroleum (OXY) .

Devon Energy’s chart doesn’t vary much from other names in the sector, many of which are trading in lockstep. For Devon, I’d be looking for a slightly deeper pullback to $47.50. I’d exit the stock if it subsequently fell below $44.80, the current location of the stock’s 50-day moving average (blue). 

For Occidental Petroleum, I’m looking to buy the stock at around $60. Again, I’d head for the exit if the stock subsequently falls below its 50-day moving average (blue), which is currently located just below $53. 

Because many of the stocks discussed above have similar-looking charts, the game plans presented are also somewhat similar. One factor to consider is that moving averages move, so exit points based on that indicator are also subject to change.

Please note that a decline below the 50-day moving average isn't always a reason to sell. EOG Resources, Devon Energy and Occidental Petroleum all reached 52-week highs within the past two weeks, so we have to take that fact into consideration. 

If a stock falls from a 52-week high, that was made well above the 50-day MA, then a decline below that key indicator is a red flag that calls for an exit

For the broader market, the S&P 500 has rallied to a descending bearish trend line that has been intact since late February (black dotted line). 

On the Nasdaq Composite’s chart, the index’s 200-day moving average (red) intersects with its descending trend line (black dotted line), setting up a formidable obstacle in the 22,300 area. 

Bottom Line

Regarding the S&P 500, I’ll become bullish on a close above Wednesday’s high of 6650. That would put the large-cap index above its 200-day moving average, and above its bearish trend line.

For the Nasdaq Composite, a close above 22,650 puts the tech-laden index back into bullish territory, above its trend line and above its 50-day and 200-day MAs. 

Related: Asian Markets React to Trump's Update on Iran War Progress

At the time of publication, Ponsi was long EOG.