Stocks head into the weekend on a weaker note as investor sentiment appears to be shifting from an overly optimistic outlook to one that is more cautious. Energy stocks in particular have experienced some significant selling pressure as we’ve seen a short-term decline in the price of crude oil. While crude is beginning to see some signs of technical support at $62, all of the energy companies will see the same bullish indications.
Today’s three big stock charts looks at the technical activity of Halliburton Company (NYSE:HAL), Chesapeake Energy Corporation (NYSE:CHK) and Exxon Mobil Corporation (NYSE:XOM) to identify if and where each of these highly traded energy stocks are a buy.
Halliburton Company (HAL)
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From a long-term perspective, HAL is a long-term sell as the stock is trading below its 20-month moving average. Strengthening the bearish argument is the recent cross under of the stock’s 10-month moving average. From a shorter-term trading perspective, the stock appears ready to give traders a short-term buying opportunity.
Chart support for Halliburton shares is extremely clear at $41 as the stock has seen multiple instances of price support at this price over the last year. Traders will engage the stock based on this price support. As HAL stock approaches $41 the RSI is also nearing an oversold reading that should indicate an exhaustion of the selling pressure that has forced the stock lower over the last two weeks. With a short-term buying opportunity at $41, the bullish traders will want to watch for overhead resistance and a target of $45 as the 200-day moving average, which is trending lower, will likely act to turn HAL stock lower again.
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Chesapeake Energy Corporation (CHK)
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CHK is one of the trader’s favorite stocks as the volatility and sensitivity to technical trendlines and indicators provide definitive buy and sell signals.
The stock’s recent selling dipped it below $4, but a short-term buying opportunity is growing.
Shares of Chesapeake have been improving their intermediate-term outlook as the 50-day moving average has now transitioned into a bullish pattern. This means the technical traders have a positive bias towards the shares. A break above $4 will represent a break above that same 50-day moving average. This break will trigger technical buying as CHK stock breaks above this technical trendline and a psychologically significant round-numbered price level. The stock tried to engage in a volatility rally two weeks ago, but slowed as oil prices dropped. Right now, a 7% climb in the stock would take Chesapeake Energy shares back to that volatility trigger level. At that point, the stock becomes a candidate for another 12% rally before hitting resistance at its 200-day moving average. This makes CHK the most attractive fast money stocks of these three from a trading perspective.
Exxon Mobil Corporation (XOM)
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XOM shares remain in a long-term bullish trend with support ready to kick in for the shares after their recent decline. The stock remains one of the more attractive long-term positions in the sector as well as one that is prepared to see a short-term bounce.
The short-term activity won’t be as fast as CHK, but the long-term outlook for Exxon Mobil is more attractive.
Shares of XOM are fighting to remain in a long-term bullish trend as the stock is trading below its 20-month moving average. Currently, the 10-month trendline sits at $80, indicating that we should see buyers move in to support shares at this price. As the stock approaches $80, the RSI is getting ready to trigger a short-term technical bounce as the oversold shares will more easily turn on lighter trading volume. XOM will face a test on this bounce at $81.50 as the 50-day moving average sits at this price. That said, the trendline is ascending, indicating that the stock’s intermediate-term outlook remains bullish. This makes a move above the potential resistance from the 50-day more likely, which would clear the way for Exxon Mobil to Rally towards $85.
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As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.