In a new report about the energy sector, analysts at MKM Partners discuss the recent strength in crude oil prices and the best way for traders to attack the sector. Analysts noted four pair trades to maximize traders’ potential for profits while minimizing downside risk from the volatile sector.
Oil Prices Stabilizing?
Analysts point out that WTI crude oil prices, which had spent four months in a trading range between $44 and $54, have stayed above the $54 level since mid-April. Based on the typical rules of technical analysis, analysts now see the $54 level as strong support for oil prices.
“We believe there is some room for [WTI] to push higher toward the $64 level, but we would anticipate more difficult resistance there,” analysts explain.
While Cabot’s stock recently broke above a key technical resistance level, Noble’s resistance held.
Marathon’s chart is flagging, whereas HollyFrontier remains firmly in a downtrend.
McDermott’s stock recently broke out of a six-month trading range, but Oceaneering’s stock failed to break above resistance in April.
BP’s stock has recently been making new six-month highs, but Exxon’s stock is approaching a major resistance level.
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