With crude oil prices on track to revisit their lows of the 2009 bear market, the question becomes: Will they find support, or is there still further to drop?
Faced with this uncertainty, it often helps to turn to individual stocks. And that’s Profit Scanner’s specialty.
Based on its nightly scan of the market (powered by Recognia), here are three oil stocks whose charts suggest a particularly weak outlook.
If you’re looking for a bearish trade, these three names could be just the ticket. If you own them, then buckle up, because it looks like their bumpy ride is far from over.
Crude Oil Stocks With Ugly Charts: Atwood Oceanics (ATW)
First up is offshore driller Atwood Oceanics (ATW).
While ATW stock’s been in trouble for a while, confirmation came Tuesday in the form of a descending continuation triangle.
This pattern starts off with a series of lower highs and constant lows, suggesting that sellers are more aggressive than buyers, and is confirmed when the stock breaks down through support.
Based on this, the Profit Scanner is looking for a further drop to $9 to $10 in the next 30 trading days.
Crude Oil Stocks With Ugly Charts: Helix Energy Solutions Group (HLX)
Helix Energy Solutions Group (HLX), another offshore stock, is also looking pretty rough, and on Monday, HLX stock completed a bearish symmetrical continuation triangle.
After hitting lower highs and higher lows in an increasingly narrow range, HLX ultimately broke below its lower trendline. Profit Scanner is setting a price target of $2.20 to $2.80 in the next 50 trading days.
But it might not take that long.
On Wednesday, Helix had two more bearish signals, both from moving-average crossovers.
Keep in mind: The reason moving averages are so popular is that they make it easier to spot an underlying trend. So when a shorter-term MA crosses below a longer-term MA, it suggests that the stock is in an established downtrend.
In this case, HLX’s 21-day MA crossed below the 50-day. That same day, the 4-day crossed below the 9-day, which itself crossed below the 18-day.
These two signals carry no particular price target, but provide further evidence that HLX’s weakness isn’t going away any time soon.
Crude Oil Stocks With Ugly Charts: InterOil Corporation (IOC)
InterOil Corporation (IOC), which mainly operates in the Papua New Guinea oil fields, is in a similar boat.
IOC has plummeted 14% in December alone, racking up plenty of bearish signals along the way. Most recently, IOC had a bearish triple moving average crossover between the 4-day, 9-day and 18-day averages on Tuesday.
The day before, IOC completed a bearish symmetrical continuation triangle, just like HLX.
In this case, Profit Scanner is looking for IOC to reach $25.25 to $27 within the next 49 trading days.
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.
