In a new report, MKM Partners analyst Jonathan Krinsky focused on the outlook for oil stocks. Krinsky believes that now is the time for traders to unload oil stocks that have failed to rally in recent months.

Seasonal Strength For Crude?

Although seasonal trends should never be relied upon exclusively, WTI’s historical trading pattern indicates that mid-December tends to be a seasonal bottom for oil prices. The graph below illustrates oil’s historical year-end bounce, but Krinsky cautions that oil saw no such major bounce during this period in 2014.

In addition, he pointed out that WTI’s seasonal bottom in late January/early February tends to provide a larger and more reliable bounce.

Damage Has Been Done

Despite the possibility of a mid-December bounce, Krinsky sees…

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