DB:
It's Monday close and it seems a good time to update some previous views on selected energy charts. Did a chart's previous indications play out? What does the chart say now for the near term future? [new comments in brackets]
I would suggest opening up a new window on a 2nd monitor and putting up this chart as a template. As the tickers change you can just type in and compare:
stockcharts.com[h,a]daclyiay[pb20!b50!f][vc60][iut!Ur14!Ll14]&am...
1. OSX. Downtrend intact, 3rd lower high confirmed, ATR volatility beginning to lesson. To see a steady plunge we'd like to see the black ADX line begin to strengthen and rise, confirming the trend. Logical next target on a swing is 127. [We took no time at all pausing at 127 on the downside since Friday blasted that level to bits. Today's hammer (and it is a hammer) indicates a big battle to regain the bottom of the linear regression channel and a likely move up over the next 5-6 trading days to the 129-130 level.
2. OIH. (see OSX). Logical next target is 87. [again, the likely support was too conservative and when OIH blasted down it did so with a vengeance. There is a narrow channel in the 85-87 area, but I don't expect it to stay here long. With today's hammer, though, I think we see a retrace to the 89-90 area before the next bounce down.]
3. XLE. Similar to 1 and 2, but it is forming a descending triangle (4 lower highs, but the last low was a higher low), often a precursor to a steep downside break. A break on volume through the 40 area will land all the way down at 37.90 or 38.00. Upside is pretty limited on this one, limited or non-existent in the immediate term. [we traded today as low as 37.94, made a hammer and closed at 38.63--pretty close to the calls made on this name since April 25:
Message 21320325
It's key to follow up.]
4. XEC. In some ways similar to XLE analysis. Downside target around 33.50. Probabilities to me are that 36 becomes the new ceiling in this stock. [another hammer with its tail outside the linear regression channel--could trade up to the high 35 range before running into big selling.]
5. BRY. Downtrend intact, threatening new 2005 lows and should achieve them today or in the next few days. Anyone who doubled down on this stock in the 46-47 range should exit that (and all other) positions, or that would be my recommended course of action. Next downside target is 40, after a brief rest-stop at 42. New ceiling will probably be just below here at 45. [we traded down to 40.78 today, made a squat little hammer. You can see the relentless power of a downtrend in this stock, now likely to trade for a while in the 40-45 range before its next move.]
6. EGY. As previously analyzed, the confirmed hanging man pattern of 7 days ago predicted a gap and crap and not a breakout, it has now given up all of those ephemeral gains and promises to do more damage on the downside. Hard to pick a target on such an inexpensive stock, but 3.35 should offer some support as will 3.20, but $3.00 flat wouldn't surprise me. Traded down to 3.09 today, ugly candle indicating the down in this move is not over. Average up, don't average down. Everything points down here, if 3.00 doesn't hold (I have my doubts), then the next spots for support are 2.81, 2.26 and about 1.82.]
7. ATPG. This one is battling sideways and this $19.50~20 area is for the moment promising to hold. I would note the indicators indicate that the downtrend has not been reversed, though. If I had profits in this name, I'd take them (I'd take the losses, too) and stand aside to wait for a clearer signal. [Ouch. I remember you warning several times about this stock, today gapped down, took out twenty and traded in the $17s. Ouch, ouch, ouch. No reason on earth to have owned this name since early March.]
8. MEOH. Not a good looking stock no matter what the story is. Not even good for a bounce here (well, maybe a little one); all indicators pointed south.]
[I will let these last two paragraphs stand; I think they are very true.] The task of speculation is simple: protect (first) and enhance capital. In a universe of 8,000 stocks (or 2,000 stocks with options) it is only necessary to commit capital to one name a week or less frequently, not to make a decision on each stock in the entire market. All academic testing programs imply that a signal must be taken--but the tools themselves often give "stand aside," wait for confirmation signals.
Add to that position sizing, money management tools, a variety of good exit strategies and growing experience (gut feel) in the markets and you have a fuller picture of what is possible.
Kb |
