Crude oil is under pressure on Wednesday, with the U.S. Oil Fund (USO) falling below its 50-day moving average and threatening to fall away from a topping pattern going back to May. The catalyst for the pullback was a big build in gasoline inventories suggesting that summertime driving demand is coming in a little tepid. The inventory accumulation was the first since June.
Also pointing to a potential softening of demand is the fact that U.S. oil production has fallen for the second-straight week.
Energy stocks are just beginning to pay attention to the price action, with a number of names looking vulnerable to some profit taking after an impressive rally in oil prices from the lows seen last summer. Here are five stocks to sell right now:
Energy Stocks to Sell Now: ConocoPhillips (COP)
ConocoPhillips (NYSE:COP) shares were down 2% on Wednesday, threatening to fall away from overhead resistance going back to May. Last week, the company announced it would sell its interests in the Barnett shale play to Lime Rock Resources for roughly $230 million.
The company will next report results on Oct. 25 before the bell. Analysts are looking for earnings of $1.17 per share on revenues of $9.7 billion. When the company last reported on July 26, earnings of $1.09 per share missed estimates by a penny on a drop in production out of Libya.
Energy Stocks to Sell Now: EOG Resources (EOG)
EOG Resources (NYSE:EOG) shares are threatening to fall below their 50-day moving average, down roughly 7% from the high hit in late July. Watch for a decline back to the 200-day moving average, which would be worth a loss of more than 8% from here.
The company will next report results on Nov. 1 after the bell. Analysts are looking for earnings of $1.44 per share on revenues of $4.7 billion.
When the company last reported on Aug. 2, earnings of $1.37 beat estimates by 13 cents on a 62.2% rise in revenues.
Energy Stocks to Sell Now: Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) shares are dropping out of a four-month consolidation range, threatening to fall back to its 200-day moving average, a level not seen since early April. Such a move would be worth more than 20% from current levels. The latest reports are that the company is looking to sell some pipeline assets to raise cash.
The company report results after the close yesterday. Earnings of $1.10 per share missed estimates of $1.25 per share, while revenues of $4.1 billion were in-line with expectations.
Energy Stocks to Sell Now: Marathon Oil (MRO)
Marathon Oil (NYSE:MRO) shares are drifting lower, and could also fall down out of a four-month consolidation range — setting up a fall back to its 200-day moving average, which hasn’t been tested since last October. Production gains have been tepid, with the situation in Libya weighing on the totals.
The company will next report results on Oct. 31 after the close. Analysts are looking for earnings of 22 cents per share on revenues of $1.5 billion.
When the company last reported on Aug. 1, earnings of 15 cents per share missed estimates by six cents on a 33.8% rise in revenues.
Energy Stocks to Sell Now: Cimarex Energy (XEC)
Cimarex Energy (NYSE:XEC) shares are in rough shape, dropping out of a six-month topping pattern to close back in on the lows set back in June. The stock has lost roughly half of its value from the highs seen back in January. This comes after the company reported weaker-than-expected earnings of $1.59 per share, five cents below estimates, on a 21.9% rise in revenues. Analysts at JPMorgan issued a downgrade in response.
The company will next report results on Nov. 6.
Anthony Mirhaydari is 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.
