The Profit Scanner, powered by Recognia, has identified four oil and gas stocks that just completed a particular short-term bullish event: the 21-day moving average crossover.
When these stocks crossed above their moving averages, the events confirmed that the shares are in established uptrends — and ripe for opportunistic bulls to pick.
Moving averages are crucial in technical analysis because they help smooth out the everyday “noise” in a stock chart and make it easier to identify the underlying trend. Simple moving averages, like the ones identified by Profit Scanner, are functions of the stock’s closing prices over a certain time period. The 21-day moving average, for example, is calculated by adding up closing prices over the last 21 days and dividing by 21.
To interpret a moving-average crossover, it’s important to consider the specific timeframe used in the calculation. A crossover above the 21-day moving average is considered to be a short-term bullish signal, while a 50-day moving average crossover is an intermediate-term signal, and a 200-day moving average crossover is a long-term signal.
In other words, those looking for a short-term trade would be best served by seeking out 21-day moving average crossovers like the ones the Profit Scanner has recently identified.
Let’s review the four oil and gas stocks that Profit Scanner identified as having experienced short-term bullish 21-day moving average crossover:
Pioneer Natural Resources (NYSE:PXD)
One such event occurred on Tuesday, when Pioneer Natural Resources (NYSE:PXD) closed at $159.50 on more than 2.5 million shares traded.
As you can see in the chart below, that’s significantly above the 21-day moving average:
Now, moving averages can only really tell you whether a stock is trending higher or lower; to help determine whether that’s likely to continue, it’s best to look at other technical indicators as well.
In PXD’s case, the 21-day moving average crossover coincided with another bullish signal, from the Momentum indicator — one that’s particularly compatible with a moving average. When the Momentum indicator turns bullish in this way, it suggests that the stock has enough velocity that you can consider it to be in a strong bullish trend.
Then, on Wednesday, PXD showed two more short-term bullish signals, from the MACD and the Commodity Channel Index, respectively — more evidence that Pioneer will continue higher in the short term.
Synergy Resources Corp (NYSEMKT:SYRG)
Like PXD, Synergy Resources Corp (NYSEMKT:SYRG) just enjoyed a crossover above the 21-day moving average as well. In SYRG’s case, the event occurred on Wednesday, on 813,000 shares traded, and was confirmed when SYRG stock closed at $11.88.
You can see the moving-average crossover in the chart below:
As mentioned before, the Momentum indicator is well-suited to help validate a moving-average signal — and Synergy Resources also began to show short-term bullish momentum the same day.
Gran Tierra Energy Inc. (NYSEMKT:GTE)
Wednesday was a great day for another oil and gas stock, too — Gran Tierra Energy Inc. (NYSEMKT:GTE), which rallied 5.8% on 3.1 million shares traded to close nicely above its 21-day moving average:
Other bullish events on Wednesday for GTE shares came from the Slow Stochastic and the Williams %R indicators, both of which suggest that Gran Tierra Energy stock is rising out of an oversold condition and should see some nice short-term upside.
TransGlobe Energy Corporation (USA) (NASDAQ:TGA)
Last but not least is TransGlobe Energy Corporation (USA) (NASDAQ:TGA), which also enjoyed a 5% gain on Wednesday. That day, TGA crossed above its 21-day moving average on above-average volume of about 370,000 shares traded:
Both the Fast Stochastic and the Slow Stochastic turned bullish for TGA on Tuesday, and the Wednesday move was accompanied by bullish signals from the MACD and the Williams %R.
Now, all this isn’t to say that oil and gas stocks are completely out of the woods, in terms of day-to-day price swings. But for traders who can stomach the volatility, the technicals for PXD, SYRG, GTE and TGA suggest that they are good choices for those looking for bullish profits in the energy sector.
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.