U.S. equities are dealing with an avalanche of headline risk on Wednesday, including everything from an exchange of fire between Pakistan and India, a Hanoi-based summit between U.S. President Donald Trump and North Korean leader Kim Jong Un, and Michael Cohen’s testimony in Congress. Federal Reserve Board Chair Jerome Powell speaks before the House as well.
Stocks are looking vulnerable to a pullback here, with the S&P 500 stalling at major overhead resistance levels. Yesterday, I covered four large caps that could be vulnerable to a pullback here …
Today, I want to focus on the potential for a positive outcome: A breakout higher that sets up a run at prior highs not seen in more than a year.
If such a move develops, watch for the energy sector to be among the leaders as a number of issues are rallying higher. Here are four to watch:
EOG Resources (EOG)
Click to Enlarge EOG Resources (NYSE:EOG) shares are bouncing off of their 50-day moving average and making a run at the upper end of its two-month resistance range.
Watch for a move to the 200-day moving average, which would be worth a 10%-plus move from here, as management ramps up production in response to a rally in crude oil.
The company will next report results on May 28 after the close. When the company last reported on Feb. 26, earnings of $1.24 missed estimates by 12 cents per share oil a 36.9% rise in revenues.
Exxon Mobil (XOM)
Click to Enlarge Shares of Exxon Mobil (NYSE:XOM) have already crossed back over their 200-day moving average and are challenging the highs set back in November and December.
With energy prices rallying, analysts at Macquarie upgraded shares from neutral to buy on Feb. 14. Before that, Cowen analysts issued a positive note highlighting high-profit margin growth.
The company will next report results on April 26 before the bell. Analysts are looking for earnings of 91 cents per share on revenues of $66.2 billion.
When the company last reported on Feb. 1, earnings of $1.44 per share beat estimates by 35 cents per share on an 8.1% rise in revenues.
Chevron Corporation (CVX)
Click to Enlarge Chevron (NYSE:CVX) shares are also making a run at recent highs, within a hair of challenging the October levels near $124 and the January 2018 highs near $128.
Easier this month, the company authorized a new $25 billion share buyback program. UBS analysts upgraded shares back on January to buy.
The company will next report results on April 26 before the bell. Analysts are looking for earnings of $1.51 per share on revenues of $37.8 billion.
When the company last reported on Feb. 1, earnings of $1.95 per share beat estimates by six cents on a 12.6% rise in revenues.
Click to Enlarge Independent oil and gas producer Hess (NYSE:HES) is enjoying a share price rally to its 200-day moving average, marking a rally of nearly 70% off of the lows seen in late December to return to levels seen in October.
An extension to prior highs set in early October would be worth a gain of 20% from here.
The company will next report results on April 24 before the bell. Analysts are looking for a loss of 31 cents per share on revenues of $1.5 billion.
When the company last reported on Jan. 30, a loss of 31 cents per share beat estimates by seven cents on a 30.3% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.