8 Energy Stocks in Peril as Crude Oil Breaks Down

energy stocks - 8 Energy Stocks in Peril as Crude Oil Breaks Down

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Crude oil prices are getting hit hard on Wednesday, pushing the United States Oil Fund LP (ETF) (NYSEARCA:USO) below its 200-day moving average for the first time since late November to end a four-month trading range. This also represents another failed breakout attempt for energy prices near the $55-a-barrel level.

8 Energy Stocks in Peril as Crude Oil Breaks Down

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The catalyst for the weakness — amid ongoing hopes from the bulls over the implementation of that OPEC supply freeze deal — is a combination of record high inventories and growing evidence of a rebound in U.S. shale oil activity. The market is growing more and more oversupplied.

As a result, a number of oil and gas stocks are rolling over. Here are eight to avoid or sell:

Energy Stocks in Peril: Whiting Petroleum (WLL)

Whiting Petroleum Corp (NYSE:WLL) shares have dropped below their 200-day moving average for the first time since November, down roughly a third from the early January high.

Analysts at R.F. Lafferty initiated coverage on the company back in December, highlighting the company’s position as the leading producer in the Bakken Shale (which is probably now a negative) while admittedly low cash on hand was a worry.

The company will next report results on May 23 after the close. Analysts are looking for a loss of 19 cents per share on revenues of $372 million.

Energy Stocks in Peril: Petrobras (PBR)

Petróleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) shares have fallen back to their 200-day moving average for the first time since last April — ending a long uptrend that saw shares rise 360% from its January 2016 low.

Shares are now down more than 20% from their October high and look set for a decline to the September lows near $9, at the very least.

Shares are under heavy pressure, down more than 6% on Monday, after Brazil’s stock market regulator requested the state-owned oil company resubmit three years of financial statements for the years 2013-2015.

Energy Stocks in Peril: Marathon Oil (MRO)

Marathon Oil Corporation (NYSE:MRO) shares are dropping below their 200-day moving average for the first time since before the election, threatening to put an end to the gentle uptrend that’s been in place since last spring.

The company reported better-than-expected quarterly results on Feb. 15, with a loss of 10 cents per share beating estimates by five cents on a 5.8% drop in revenue to $1.4 billion.

The company will next report results on May 17 after the close. Analysts are looking for a loss of seven cents per share on revenues of $1.34 billion.

Energy Stocks in Peril: Noble Drilling (NE)

Noble Corporation Ordinary Shares (UK) (NYSE:NE) shares have dropped below its January/February lows, falling deeper below its 50-day and 200-day moving averages.

A break below the $6-a-share level would violate the late December support and setup a test of the November low below $5. The stock is down more than 80% from its 2013 high.

The company will next report results on May 11 after the close. Analysts are looking for a loss of 18 cents per share on revenues of $363.5 million.

Energy Stocks in Peril: Transocean (RIG)

Transocean LTD (NYSE:RIG) shares are down by more than 20% from their December/January highs and dropping out of the two-month basing range with support at $13 now broken.

Next up is the 200-day moving average just below the $12-a-share level. Watch for a drop back toward the year-long trading range near $10 that dominated 2016.

The company will next report results on May 25 before the bell. Analysts are looking for a loss of 7 cents per share on revenues of $736 million. On Feb. 23, the company reported better-than-expected earnings of 63 cents per share on revenues of $974 million (down 47% from last year).

Energy Stocks in Peril: Halliburton (HAL)

Halliburton Company (NYSE:HAL) is dropping below the $52-a-share level for the first time since November, dropping out of a five-month head-and-shoulders reversal pattern setting up a decline to the 200-day moving average near $48.

Shares of the oilfield services provider more than doubled off of the low of $27.08 set in January 2016, but now look vulnerable to sustained pullback.

The company will next report results on April 24 before the bell. Analysts are looking for earnings of 13 cents per share on revenues of $4.21 billion.

Energy Stocks in Peril: ConocoPhillips (COP)

ConocoPhillips (NYSE:COP) shares have dropped below a three-month support line at the $47-a-share level to return to levels not seen since late November.

The recent downtrend started after the stock bonked at resistance in the mid-$50s, a level that turned the stock back in late 2015 as well. The company reported a loss of 26 cents per share last quarter.

The company will next report results on May 4 before the bell. Analysts are looking for a penny per share on revenues of $7.8 billion.

Energy Stocks in Peril:  Schlumberger (SLB)

Schlumberger Limited. (NYSE:SLB) shares have collapsed below their 200-day moving average, falling through support at the $80-a-share level. The new downtrend ends more than a year-long uptrend out of the January 2016 low that saw shares lift more than 50%.

In a hat tip to the increased drilling rig activity — spurred by the crude oil price recovery last week — that now threatens to worsen the oversupply situation, the company highlighted an increase in fracking activity in the Middle East and North America last quarter.

The company will next report results on April 21 before the bell. Analysts are looking for earnings of 27 cents per share on revenues of $7 billion.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/eight-energy-stocks-in-peril-as-crude-oil-breaks-down/.

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