This Oil Stock Is Bad News

by Sam Collins | September 21, 2012 1:01 am

Murphy Oil Corp. (NYSE:MUR[1]) — 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.

09 21 12 mur 300x206 This Oil Stock Is Bad News
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chart key 300x84 This Oil Stock Is Bad News

Endnotes:
  1. MUR: http://studio-5.financialcontent.com/investplace/quote?Symbol=MUR

Source URL: http://investorplace.com/2012/09/trade-of-the-day-murphy-oil-corp-nyse-mur/
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