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Vitalii Liubimov's Avatar
published in Blogs
Jan 19, 2021

Oil & Gas Exploration Stocks that are Overbought and Just Got Bearish Signals

Oil companies, especially exploration companies, have rallied sharply since the end of October. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rallied 89.7% from the October low to last week’s high. The huge rally has put the ETF in overbought territory based on the 10-day RSI and daily stochastic indicators.

The ETF came to my attention on Friday when I ran a scan of stocks that were overbought and had seen their daily stochastic indicators make bearish crossovers. The XOP was on the list along with 10 individual companies. I ran these 10 companies through the Tickeron Screener and there were two companies that jumped out at me for getting bearish signals with pretty high confidence levels.

Cabot Oil & Gas (COG) and EQT Corp. (EQT) were the two companies with bearish signals and both received bearish signals on January 15. The signal for EQT showed a confidence level of 76% and Cabot’s signal showed a confidence level of 75%. These signals call for declines of at least 4% over the next month.

Looking at the fundamental analysis indicators, both companies have more negative marks than positives, but EQT has five negative scores and only one positive score. Cabot has four negative scores and three positive scores. Both companies get poor ratings from the Valuation Ratings, the Profit vs. Risk Ratings, the SMR Ratings, and the Seasonality Scores. The only area where they both score well is the Outlook Ratings.

The stocks score much better on the technical side. EQT has three bullish signals and two bearish signals while Cabot has four bullish signals and one bearish signal. Both companies got bearish signals from the Bollinger Bands and both have been overbought for numerous days on the stochastic indicators and the RSI indicator. Both companies get have received bullish signals from the MACD, the Momentum Indicator, and the Moving Average indicator.

Oil prices have been considerably more volatile recently and the energy sector has followed suit. Over the last few months the energy sector has been the top performing sector on a number of days, but it has also been the worst performer on a number of days. Obviously with the upward trajectory of the stocks over the last few months, there have been more big upward moves than downward ones.

For a complete comparison between Cabot and EQT see the Tickeron analysis below. The analysis shows how these two companies score compared to one another, and it also looks at the industry as a whole.

Related Ticker: XOP

XOP sees MACD Histogram just turned negative

XOP saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on May 22, 2024. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 42 instances where the indicator turned negative. In of the 42 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

XOP moved below its 50-day moving average on May 21, 2024 date and that indicates a change from an upward trend to a downward trend.

The 10-day moving average for XOP crossed bearishly below the 50-day moving average on May 10, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where XOP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

The Aroon Indicator for XOP entered a downward trend on May 10, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Bullish Trend Analysis

The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.

The Momentum Indicator moved above the 0 level on May 28, 2024. You may want to consider a long position or call options on XOP as a result. In of 75 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where XOP advanced for three days, in of 334 cases, the price rose further within the following month. The odds of a continued upward trend are .

XOP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Fundamental Analysis (Ratings)

Fear & Greed

Notable companies

The most notable companies in this group are Exxon Mobil Corp (NYSE:XOM), Chevron Corp (NYSE:CVX), ConocoPhillips (NYSE:COP), EOG Resources (NYSE:EOG), MARATHON PETROLEUM Corp (NYSE:MPC), Phillips 66 (NYSE:PSX), Pioneer Natural Resource Co (null:PXD), Occidental Petroleum Corp (NYSE:OXY), Valero Energy Corp (NYSE:VLO), Hess Corp (NYSE:HES).

Industry description

The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of an index derived from the oil and gas exploration and production segment of a U.S. total market composite index. In seeking to track the performance of the S&P Oil & Gas Exploration & Production Select Industry Index, the fund employs a sampling strategy. It generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index represents the oil and gas exploration and production segment of the S&P Total Market Index ("S&P TMI").

Market Cap

The average market capitalization across the SPDR® S&P Oil & Gas Explor & Prodtn ETF ETF is 31.64B. The market cap for tickers in the group ranges from 481.02M to 461.22B. XOM holds the highest valuation in this group at 461.22B. The lowest valued company is TELL at 481.02M.

High and low price notable news

The average weekly price growth across all stocks in the SPDR® S&P Oil & Gas Explor & Prodtn ETF ETF was 10%. For the same ETF, the average monthly price growth was 16%, and the average quarterly price growth was 43%. CLNE experienced the highest price growth at 10%, while GPRE experienced the biggest fall at -6%.

Volume

The average weekly volume growth across all stocks in the SPDR® S&P Oil & Gas Explor & Prodtn ETF ETF was 6%. For the same stocks of the ETF, the average monthly volume growth was 2% and the average quarterly volume growth was -40%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 58
P/E Growth Rating: 15
Price Growth Rating: 50
SMR Rating: 51
Profit Risk Rating: 49
Seasonality Score: 27 (-100 ... +100)
View a ticker or compare two or three
XOPDaily Signal changed days agoGain/Loss if shorted
 
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