Crude oil is mounting quite the comeback. The price of oil is up 35% since mid-March and has done wonders in improving the technical structure of its chart.
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The regime of crashing oil prices seems to be over, and a new, stable uptrend has taken root in the rubble.
On the heels of the oil rebound, the energy sector — and oil and gas stocks in particular — have bottomed and are now pointing higher. The SPDR S&P Oil & Gas Explore & Prod. (ETF) (NYSEARCA:XOP) boasts rising 20- and 50-day moving averages with multiple accumulation days to boot.
The past week has brought profit taking to the surging sector, creating a nice little pullback. This is a good thing for would-be buyers of the XOP ETF or individual oil and gas stocks as it provides a lower-risk entry.
Here are three of the best oil and gas stocks to buy right now.
Oil and Gas Stocks: Anadarko Petroleum Corporation (APC)
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Shares of Anadarko Petroleum Corporation (NYSE:APC) have clawed their way back above the pivotal 200-day moving average for the first time in seven months. It’s one of the first beaten-down oil and gas stocks to reclaim such high ground.
What’s more, APC stock has bested the bounce in XOP by a respectable margin. APC is up 31.7% since bottoming in mid-December while the XOP is 28.7% off its lows.
The outperformance is easily seen by the recent turnabout in APC stock’s comparative relative strength study.
Buy the June $92.50 calls for $5 to profit from a continuation of APC’s ascension.
Oil and Gas Stocks: Apache Corporation (APA)
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The price action in Apache Corporation (NYSE:APA) is flashing bottoming signals aplenty.
Since its harrowing descent last fall, shares of APA have stabilized with a classic ascending triangle formation. The higher pivot lows reveal increased aggression by dip buyers — a change in character for the once nosediving stock.
The recent breakout in APA stock both completed and confirmed the ascending triangle bottom. This week’s pullback provides a low-risk entry for those looking to get in on the action.
Buy the June $67.50 calls for $3.75 to participate in continued upside in APA over the coming month.
Oil and Gas Stocks: Marathon Oil Corporation (MRO)
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The recent price action in shares of Marathon Oil Corporation (NYSE:MRO) is similar to its brethren oil and gas stocks.
MRO has based long enough for the 50-day moving average to flatten out and heal the damage done to its trend structure during last year’s downturn.
What’s perhaps the biggest standout in MRO stock over the past month is the number of high-volume up days. These accumulation days suggest institutions have been piling into the stock, which should continue to support it going forward.
Buy the June $30 calls at $1.53 for a cheap, limited risk bet that MRO continues its rise.
As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.
