Energy might be the worst-performing sector in the U.S. stock market year to date, but it is nonetheless home to nine interesting charts that might provide trading opportunities. Three have established bullish formations, while the other six are sitting near support — meaning that they could be a source of beta in either a rally or a further downturn.
While the stocks themselves are a diverse group, they have one thing in common: All nine deserve a spot on short-term traders’ watch list.
The three bullish charts are smaller names that may not be familiar to most investors. The first is a master limited partnership, or MLP: TransCanada. (NYSE:TRP). TRP has been in a consolidation pattern for about 12 months, as it had to digest a period of strong, multiyear gains. Now, it is just short of 52-week highs: TRP closed Friday at $43.04, within range of its 52-week high of $45.09. While the chart has bullish potential, there’s also a caveat: Investors in TRP should carefully monitor the lower trendline for a possible breakdown.
The other two charts to watch are small caps: Bristow Group (NYSE:BRS) and Crosstex Energy (NASDAQ:XTXI). Bristow, which provides helicopter transportation to offshore platforms, is similar to TRP in that it looks to be setting up for an assault on its previous high ($52.89), but the story could unravel quickly if the stock breaks its lower trendline or 200-day moving average. Crosstex, for its part, already has moved out to new high ground and is in the process of looking for support at its previous breakout level of $15.25.
The next six names are all stocks that appear close to breaking down. However, with the exception of QEP Resources, all of have fallen so far in the past two months that a collapse to new lows could prove to be a head-fake. Rock-bottom valuations, which are listed below, also reduce the chances of a protracted downturn in these names if the broader tape is benign. Alert buyers might be able to take advantage of this to pick up shares at prices that might only last for a day or two.
Hess (NYSE:HES)
Friday’s close: $47.95
Support: $46.66
Return since 2/21: -26. 68%
Forward P/E: 6.2
Petrobras (NYSE:PBR)
Friday’s close: $20.90
Support: $20.76
Return since 2/21: -28.10%
Forward P/E: 6.0
Talisman Energy (NYSE:TLM)
Friday’s close: $10.84
Support: $10.75
Return since 2/21: -22.01%
Forward P/E: 10.0
Precision Drilling (NYSE:PDS)
Friday’s close: $8.23
Support: $7.52
Return since 2/21: -31.30%
Forward P/E: 5.6
Superior Energy Services (NYSE:SPN)
Friday’s close: $23.66
Support: $22.19
Return since 2/21: -19.39%
Forward P/E: 6.2
QEP Resources (NYSE:QEP)
Friday’s close: $29.33
Resistance: $32.19
Support: $28.50
Return since 2/21: -7.48%
Forward P/E: 13.1
As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.
