1. Several readers expressed an interest as to which energy stocks were at the top of my list. Before I list them, please know these are by no means the only ones worth trading or investing in. The following names are simply the ones I most frequently trade.
When I trade the energy sector on a day timeframe basis, which is all I am currently doing, I generally stick with ConocoPhillips (COP) ¿ which is being held in the Dividend Stock Advisor portfolio -- Chevron (CVX), EOG Resources (EOG) ¿ which is a name in the Action Alerts PLUS portfolio -- Halliburton (HAL), Occidental Petroleum (OXY), Schlumberger (SLB) and Exxon Mobil (XOM). Until I can confidently identify an aggressive buyer in the space, I tend to avoid the names I regard as more second tier.
I traded the majority of the aforementioned stocks on Wednesday. But until I see bids firm around the sector, and am moderately confident I won't wake up to crude oil or the equity futures trading 2%, 3% or even 5% lower, I will remain strictly a day timeframe participant in the energy patch.
2. The most bullish thing I can say about light crude oil's price action over the past few sessions is sell pressure appears to have faded. Unfortunately, as bearish momentum has slowed, so too has any buying. My levels of interest here are $37.75 and $40.50. A close above $40.50 and I'd expect a more impressive bid to find its way under both crude oil, and the energy sector as a whole.
3. Just as we monitor short-term, eight-day and 21-day exponential moving averages (EMA) for buyable areas when the market is trending bullishly, so too should we focus on those reference points for shortable areas in bear trends. If you're a short-term trader and willing to sell short, the eight-day and 21-day EMAs should be front and center on your daily charts.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS.