Crude oil was smashed lower for the 12th consecutive session on Tuesday. West Texas Intermediate lost 7.1%, returning to levels not seen since November.
Investors have become more fearful over tepid demand and strong supply out of the OPEC countries and Russia. One of the largest energy stocks, Halliburton (NYSE:HAL) fell 5.5% to return to early 2016 levels. The decline pushed the S&P 500 energy sector to a loss of nearly 14% since the beginning of October, following a 27.6% decline for WTI crude.
Jason Goepfert at SentimenTrader notes that the black stuff has just suffered “one of its most epic collapses in 30 years and is the most oversold ever.”
On a relative strength indicator basis, Goepfert notes that oil is not at its most oversold since the futures contract started trading in 1983. He points out that outside of the oil collapses in early 1986 and in late 2008, one-day declines of the type seen today have only been seen three other times (January 1991, June 1998, and December 2000).
A number of large energy stocks have been caught in the whirlwind. Here are five to avoid:
Energy Stocks to Sell: Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) shares are threatening to fall back below their 200-day moving average and return to the lows tested in August and again in late October. Already down nearly 12% from its September high, XOM remains mired in a sideways listlessness that’s been in play since the summer of 2016.
The company will next report results on February 1 before the bell. Analysts are looking for earnings of $1.34 per share on revenues of $79.3 billion. When the company last reported on November 2, earnings of $1.46 per share beat estimates by 24 cents on a 25.4% rise in revenues.
Energy Stocks to Sell: Chevron (CVX)
Chevron (NYSE:CVX) shares have fallen back below their 50-day and 200-day moving average, looking set to return to the late-October levels that marked a retest of the lows set back in February. The stock has been struggling to break out of a consolidation range that’s dominated the trading action all year. Not even a recent upgrade from analysts at Credit Suisse can break the headwinds from the ongoing weakness in crude oil.
The company will next report results on February 1 before the bell. Analysts are looking for earnings of $2.50 per share on revenues of $45.11 billion. When the company last reported on November 2, earnings of $2.11 beat estimates by five cents on a 21.5% rise in revenues.
Energy Stocks to Sell: ConocoPhillips (COP)
Conoco (NYSE:COP) shares are testing below their 50-week moving average for the first time since the middle of 2017, returning to lows seen back in April. The stock was recently upgraded to buy by analysts at Bank of America Merrill Lynch following solid quarterly results. But the top line pressure from falling crude prices hasn’t stopped the bleeding, with prices already down nearly 18%.
The company will next report results on January 31 before the bell. Analysts are looking for earnings of $1.35 per share on revenues of $12.3 billion. When the company last reported on October 25, earnings of $1.36 beat estimates by 17 cents on $9.8 billion in revenues.
Energy Stocks to Sell: EOG Resources (EOG)
EOG Resources (NYSE:EOG) shares are threatening to fall below critical lows set between October and March, opening the door to a decline all the way back to the summer 2017 lows near $82.50. Already down nearly 25% from the highs set in early October, such a move would be worth a further loss of 18% from here.
The company will next report results on February 26 after the close. Analysts are looking for earnings of $1.65 on revenues of $4.8 billion. When the company last reported on November 1, earnings of $1.75 beat estimates by 21 cents on a 80.8% rise in revenues.
Energy Stocks to Sell: Schlumberger (SLB)
Schlumberger (NYSE:SLB) shares are in meltdown mode, suffering a waterfall collapse from the highs set back in May as investors prepare for a slowdown in oil and gas production activity. Investors have already suffered a decline of more than 35%, with further losses looking likely as prices return to levels not seen since all the way back in 2010.
The company will next report results on January 18 before the bell. Analysts are looking for earnings of 42 cents per share on revenues of $8.4 billion. When the company last reported on October 19, earnings of 46 cents per share beat estimates by a penny on a 7.6% rise in revenues.
The author holds no positions in the aforementioned securities.