This Oil Stock Is Bad News

Murphy Oil Corp. should resume its bear market after crude's false breakout to $100


Murphy Oil Corp. (NYSE:MUR) — This company engages in the exploration and production of oil and gas properties worldwide. It is also involved in refining crude into petroleum products, which it markets through a network of retail gasoline stations and unbranded wholesale customers. Murphy is in a highly competitive area of the oil and gas industry, and thus analysts’ price projections have a median target of just $60 within one year.

The recent run in crude oil prices close to $100 per barrel is now considered by analysts to be a false breakout. Therefore, as a marginal producer,MURshould resume its bear market by dropping through the minor support at $50 and fall to its low of the year at $40. In May, the chart posted a death cross (long-term bearish signal) and recently failed to hold above its 200-day moving average.

SellMURat the market. Traders may want to short the stock at $54 with a stop-loss order at $58. Short-selling is a speculative, high-risk strategy, so a stop-loss order should always be entered to protect against unlimited losses. And check with your broker for any margin requirements.

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