With oil logging its biggest weekly gain since late July and hitting multiyear highs, energy stocks have been leading the S&P 500 index and the broader market. Here are five energy stocks with compelling chart action: ConocoPhillips (COP), Valero Energy (VLO), Hollyfrontier (HFC), Wildhorse Resource (WRD) and Viper Energy Partners (VNOM).
U.S. crude rose 0.5% Friday to settle at $67.39 a barrel, marking a weekly gain of 8.6% and hitting the highest level since late 2014. Brent crude gained 0.8% to $72.58 a barrel for a weekly increase of 8.2%.
U.S. crude futures fell 1.3% Monday morning as investors saw Syria tensions contained following U.S.-led airstrikes on Saturday. If oil prices retreat significantly, crude-related stocks will struggle to advance or even maintain current levels.
Energy Stocks Look Hot
Small-cap shale play Viper Energy, a subsidiary of Diamondback Energy (FANG) leads the group with a near-best Composite Rating of 98. Wildhorse Resource, another shale play, earns a 97. ConocoPhillips and Hollyfrontier each have a 96 while Valero has a 94.
ConocoPhilips, Valero, Hollyfrontier, Wildhorse and Viper Energy all have relative strength lines at record highs, reflecting these energy stocks’ outperformance of the S&P 500 index.
Valero, Wildhorse Are In Buy Range
Wildhorse and Valero are presenting potential buying opportunities.
Valero Energy broke out of a consolidation base with a 100.05 buy point on Wednesday. Valero stock is hitting an all-time high Friday, up 1.3%. Shares are still well within the 5% buy zone.
Wildhorse Resource climbed 1.4% to a new high Friday. The energy stock cleared a 21.53 buy point from a cup base on Thursday. Wildhorse has an especially bullish RS line. Not only is it at new high ground now, but it was at a new high before the stock hit a new price high. Wildhorse came public in December 2016.
Mind The 5% Buy Zone
The three other energy stocks, ConocoPhillips, Viper Energy Partners and Hollyfrontier, are now extended from buy range. While you never want to chase a stock more than 5% past a buy point, many leaders will pull back into buy range. Keep in mind, however, that you want to see light volume on the pullback, rather than rapid selling.
ConocoPhillips is extending gains Friday, rising 2.6%, after clearing a 61.41 buy point several sessions ago. The stock has now gained 6% from that entry.
Viper Energy Partners
Viper Energy Partners is up 7% since breaking out of a consolidation with an entry point at 26.29 on April 5. It also has a strong RS line. Parent company Diamondback has been trending lower since an attempted breakout in late March that ultimately failed.
Hollyfrontier is continuing to rise steadily since its April 4 breakout from a cup-with-handle base with a 50.60 buy point. Shares are now extended 10% past the entry. You never want to see a double-digit gain disappear, so if Hollyfrontier pulls back, be careful about round-tripping.
Meanwhile, BP (BP) is trading 4% below a cup-shaped base with a buy point at 44.72. BP has a Composite Rating of 84.
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