Crude Rally Opens Door For Oil Stocks Upside
OPEC and the market have a lot to do with the current consolidation breakout for Oil. On pace for a second key accumulation day close this is a short term buying opportunity for oil related stocks (drillers, explorations, etc.).
What we use to track oil is the United States Oil Fund (USO) which is an ETF that tracks the spot price of crude. View the chart below to see today’s breakout. Take note the market has not yet closed today so chart will adjust at session close.
The reason this is important for short term investors is it gives credibility and momentum for oil related stocks. These stocks could now be in favor for the next few weeks.
We recommend new investors read Stock Charts, Understanding the Basics and browse the technical analysis archives before viewing the charts below.
Some stocks to watch or play off this momentum include the below. Note there are more than this we just are posting several of the more well known companies:
- Helmerich & Payne (HP) – Drilling
- Ensco International (ESV) – Drilling
- Nabors Industries (NBR) – Drilling
- Continental Resources (CLR) – Explor/Prod
- St Mary Land (SM) – Explor/Prod
- Chesapeake Energy (CHK) – Explor/Prod
- Devon Energy (DVN) – Explor/Prod
Stock Charts Numbered (click to view full chart):
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Another way to play this is to simply buy USO or even DIG which is the Ultra ETF that tracks the performance of the Dow Jones US Oil and Gas index. Could be good for a move to $50, currently trading just above $37. Also watch OIH which is the ETF tracking the Oil services industry. Breaking above $100 consolidation today although on lower volume.
Last note is there is a noticeable movement towards alternative energy stocks. LDK, CSIQ, ENER, etc. FSLR has had a phenomenal few days since killing its earnings. These are arguably speculative plays though associated with politics so be conscious of added volatility if deciding to get involved.
