Fundamental analysis:
With oil currently trading at around 18$/barrel, it's going to be really tough for oil companies to be operating on a profit for the foreseeable future. Oil production equipment isn't meant to be halted so we can even expect extra logistical cost to storing all of it. Once travel ban is lifted around end of june, i will look to switch to a more bullish position.
Technical analysis:
Held off posting this idea once I saw the right shoulder of the pattern break but it seems we won't have a daily close over it which means the H&S pattern is still in play. Conservative traders might look to wait for the neckline to break @ around 39$, personally will gradually increase my position as I see this play out. Earnings is in 7 days so watchout for a pre-earnings rally; it's a great opportunity to get a great entry price if it pans out.
Currently there's a bearish divergence that was formed on the MACD
As you can see our targets line up perfectly with the .618 fibonacci level where we might see a reversal or continuation depending on how the situation develops. Cheers and goodluck
TP1 @ 39.00$
TP2 @ 35.75
With oil currently trading at around 18$/barrel, it's going to be really tough for oil companies to be operating on a profit for the foreseeable future. Oil production equipment isn't meant to be halted so we can even expect extra logistical cost to storing all of it. Once travel ban is lifted around end of june, i will look to switch to a more bullish position.
Technical analysis:
Held off posting this idea once I saw the right shoulder of the pattern break but it seems we won't have a daily close over it which means the H&S pattern is still in play. Conservative traders might look to wait for the neckline to break @ around 39$, personally will gradually increase my position as I see this play out. Earnings is in 7 days so watchout for a pre-earnings rally; it's a great opportunity to get a great entry price if it pans out.
Currently there's a bearish divergence that was formed on the MACD
As you can see our targets line up perfectly with the .618 fibonacci level where we might see a reversal or continuation depending on how the situation develops. Cheers and goodluck
TP1 @ 39.00$
TP2 @ 35.75
Comment:
Pre-earnings rally was more generous than expected, managed to get an entry @46.85. There's another bearish divergence that formed on our run up to the 46$ region which confirms the overall bearish sentiment in oil production stocks. Cheers.