With oil and gas gapping higher or lower seemingly every day, many investors are leaving aside the question of whether energy has made a longer-term bottom … and instead looking to capture shorter-term moves in oil and gas stocks.
The Profit Scanner powered by Recognia has found no shortage of opportunities for quick profits with oil and gas stocks.
From its extensive daily scan of more than 65,000 charts, here are four oil and gas stocks that the Profit Scanner is targeting for short-term bullish trades.
4 Oil and Gas Stocks to Play a Bounce: Laredo Petroleum Inc (LPI)
Click to Enlarge Laredo Petroleum Inc (NYSE:LPI) is an oil and gas exploration and production (E&P) company based in Tulsa, Oklahoma, and on Wednesday two of its indicators turned short-term bullish: the Williams %R and the Momentum indicator.
The former basically tells you whether a stock is overbought (a reading of -20) or oversold (a reading of -80). You can see in the chart that LPI’s %R recently rose above the -80 level and continued through -50 — a clear reversal.
This suggests that LPI is embarking on a new uptrend after having recovered from the previous oversold condition.
The other short-term bullish signal, from the Momentum indicator, supports the idea that Laredo will trend higher. This indicator compares the latest price to the price 10 bars ago — and when the current price is higher (a positive reading), it shows that this is one of the oil and gas stocks with good upward momentum.
4 Oil and Gas Stocks to Play a Bounce: Sanchez Energy Corp (SN)
Click to Enlarge Another of our oil and gas stocks, Sanchez Energy Corp (NYSE:SN), turned short-term bullish on Wednesday as well. The chart showed a bullish Outside Bar pattern, in which the day’s trading range completely encompasses the prior bar, and it occurs during a strong downtrend.
The Outside Bar is a sign that sellers are showing signs of exhaustion — which means the stock may soon reverse higher.
In the SN chart, you can see both the Outside Bar and another bullish signal from the Relative Strength Index (RSI) indicator. An RSI reading of 70 indicates overbought, and a reading of 30 indicates oversold.
So, now that Sanchez’s RSI has started to rise above that 30 level, it seems the stock is beginning to recover — and we could see higher prices ahead.
4 Oil and Gas Stocks to Play a Bounce: Newfield Exploration Co. (NFX)
Click to Enlarge Newfield Exploration Co. (NYSE:NFX) has had a strong chart for much of May, and the latest bullish signal came on Tuesday, when the stock enjoyed a bullish Triple Moving Average Crossover.
Specifically, NFX’s four-day moving average crossed above its nine-day moving average, which in turn crossed above the 18-day, as you can see in the chart below.
When trying to make sense of moving averages, be sure to pay attention to the time frame involved. In this case, the three moving averages cover very short-term periods, which makes this a short-term signal.
Our takeaway is that NFX’s recent strength puts it in an established uptrend over the near term.
4 Oil and Gas Stocks to Play a Bounce: Midstates Petroleum Company Inc (MPO)
Click to Enlarge Last but not least is Midstates Petroleum Company Inc (NYSE:MPO), which is also holding its own quite well: up 9% in the last month, and giving off seven bullish signals in a row. Most recently, MPO’s Commodity Channel Index turned short-term bullish on Tuesday.
This oscillator maps a stock’s movement against its 20-day moving average, and when the Commodity Channel Index reading is above 100, that’s a signal to initiate a long position. This is a near-term moving average — so, here, too, you’d interpret this as a bullish signal for a short-term trade.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.
