4 Major Energy Stocks to Ditch Now

Get out of these four energy stocks before they turn sour

By Anthony Mirhaydari, InvestorPlace Market Strategist

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energy stocks

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Energy stocks are getting smashed lower on Friday, with the Energy Select SPDR (NYSEARCA:XLE) falling 3.1% in mid-day trading to cut below its 20-day moving average for the first time since early April. The catalyst is an accelerating decline in crude oil, which was recently above $70 a barrel but is trading with a $68 handle now.

Profit taking is setting in now, as traders look to exit key stocks in the sector after an impressive run-up in recent weeks. The memory of the nasty volatility seen earlier this month remains fresh. And we’re heading into what’s seasonally the worst six months of the year for the market.

Here are four mega-cap energy stocks to sell now:

Energy Stocks to Ditch Now: Chevron (CVX)

Chevron Corporation (NYSE:CVX) shares have dropped hard out of a multi-week consolidation range, falling back towards its 50-day moving average after hitting double-top resistance near $130. Watch for a decline back toward $112, which has been a support/resistance line going back to 2014.

The company will next report results on July 27 before the bell. Analysts are looking for earnings of $1.99 per share on revenues of $47.6 billion. When the company last reported on April 27, earnings of $1.90 beat estimates by 41 cents on a 13% rise in revenues.

Energy Stocks to Ditch Now: Exxon Mobil (XOM)

Exxon Mobil (NYSE:XOM) shares have sliced back below their 200-day moving average — down nearly 5% from the high set last week, setting up a test of recent support near the $75-a-share level.

The roughly 14% rally off of the early April low wasn’t enough to challenge the highs set in early February but merely filled in the rapid pullback suffered during the broad market selloff during that time.

The company will next report result son July 27 before the bell. Analysts are looking for earnings of $1.16 per share on revenues of $72.9 billion. When the company last reported on April 27, earnings of $1.09 missed estimates by a penny on a 2.5% rise in revenues.

Energy Stocks to Ditch Now: ConocoPhillips (COP)

ConocoPhillips (NYSE:COP) shares have pulled back from their recent push above the $70-a-share level, returning to highs not seen since the summer of 2014, in what could be the formation of a possible head-and-shoulders reversal pattern. Watch for a possible violation of the 50-day moving average, which would set up a fall all the way back to the February-March lows above the 200-day average.

The company will next report results on July 26 before the bell. Analysts are looking for earnings of 92 cents per share on revenues of $8.9 billion. When the company last reported on April 26 earnings of 96 cents per share beat estimates by 22 cents on revenues of $8.7 billion.

Energy Stocks to Ditch Now: Halliburton (HAL)

Haliburton (NYSE:HAL) shares have sliced below their 50-day moving average, gapping down out of a two-month consolidation range that failed to push up to the prior highs set in January. Analysts at Bank of America Merrill Lynch upgraded shares earlier this month, but the buying tailwind wasn’t sustained.

The company will next report results on July 23 before the bell. Analysts are looking for earnings of 59 cents per share on revenues of $6.1 billion. When the company last reported on April 23, earnings of 41 cents per share beat estimates by a penny on a 34.1% 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.

Editor’s note: a prior version of this article had incorrect section breaks.  Each should have read “Energy Stocks to Ditch Now:”.  This has been corrected.


Article printed from InvestorPlace Media, https://investorplace.com/2018/05/4-major-energy-stocks-to-ditch-now/.

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