Oil and gas stocks are pushing lower on Monday, with the Energy Select SPDR (NYSEARCA:XLE) threatening to fall out of what looks like a head-and-shoulders reversal pattern. That traces a return to the August/September lows.
The catalyst? Fears that an upcoming OPEC cartel meeting — expected to extend the oil supply freeze agreement first teased in February 2016 and agreed to late last year — will prove to be a disappointment as U.S. shale producers continue to claw back market share lost when Saudi Arabia unleashed its oil price war in 2014.
The result could be another leg lower in prices, would which increase the financial pressure on smaller, high-cost producers.
The selling pressure is hitting independent oil and gas stocks the hardest. Here are five suffering:
Energy Stocks: ConocoPhillips
ConocoPhillips (NYSE:COP) shares are down 10% from their early November highs amid broad industry pressure and word that management has penciled in a $50-a-barrel oil price when considering new projects — a sign that they expect the cheap energy environment to persist.
The move pushes shares back below the 50-day moving average, setting up a possible drop to the 200-day average.
The company will next report results on Feb. 1 before the bell. Analysts are looking for earnings of 33 cents per share on revenues of $7.4 billion.
When the company last reported on Oct. 26, earnings of 16 cents per share beat estimates by eight cents — well ahead of the 66 cent loss reported in the year-ago period.
Energy Stocks: Pioneer Natural Resources
Pioneer Natural Resources (NYSE:PXD) shares look ready for a break of the 50-day moving average after bonking badly on its 200-day average near $160.
Watch for a move to the August/September lows, near $125, which would be worth a 16% decline from here. Shares are already down 25% from the highs set back in February.
The company will next report results on Feb. 6 after the close. Analysts are looking for earnings of 61 cents per share on revenues of $1.6 billion.
When the company previously reported on Nov. 1, earnings of 48 cents per share beat estimates by 20 cents on a 23.1% rise in revenues.
Energy Stocks: Devon Energy
Devon Energy Corp (NYSE:DVN) shares have fallen to test support at the 50-day moving average, down 10% from the early November high, putting the 200-day average at risk as well.
Watch for a break to the late October low — an 8% loss from here, ahead of a possible drop back to the August lows.
The company will next report results on Feb. 13 after the close. Analysts are looking for earnings of 58 cents per share on revenues of $3.5 billion.
When the company last reported on Oct. 31, earnings of 43 cents per share beat estimates by five cents on a 9.5% rise in revenues.
Energy Stocks: Apache
Apache Corporation (NYSE:APA) shares are closing in on a 10% decline from their recent high, closing in on the low from August/October.
Shares are already down more than 40% from the highs set last December as the rebound in energy prices has failed to generate buying interest. Analysts at JPMorgan recently downgraded the stock, cutting their rating to “neutral.”
The company will next report results on Feb. 22 before the open. Analysts are looking for earnings of 12 cents per share on revenues of $1.5 billion.
When the company last reported on Nov. 2, earnings of four cents per share beat estimates by six cents despite a 3.5% drop in revenues.
Energy Stocks: Hess
Hess Corp. (NYSE:HES) shares have fallen back below their 50-day and 200-day moving averages, down more than 10% from their recent high. Watch for a fall to the late August low, which would be worth nearly a 15% loss from here.
Investors have failed to react to management’s plan to divest oil and gas assets in Norway for $2 billion, which was announced in late October.
The company will next report results on Jan. 24 before the bell. Analysts are looking for a loss of 94 cents per share on revenues of $1.4 billion.
When the company last reported on Oct. 25, a loss of $1.07 per share beat estimates by 21 cents thanks to a 39.3% rise in revenues.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
