Energy names continue to follow through on recent bullish trends, following news that major producers reached a deal to cut output over the weekend. It also helps that many of these candidates are small cap stocks. IWM has consistently outperformed the big cap indices post election, echoed by the S&P600 small cap index, which posted an 18% gain since the November lows. SML chart below.
Producers from outside OPEC agreed to cut output by 558,000 barrels per day, after OPEC announced plans last month to cut output by 1.2 million bpd. – Source Investing.com
Small Cap “Oil and Equipment Services Industry Group stocks have seen continuous buying over the past few weeks. Most of these stocks trade on the Russell and S&P600 Small Cap Index. They are worth a look in my humble opinion. Use smaller position sizing, as these stocks are being run up by fund managers eager to increase their returns for 2016. Bonus Time.
NADL by 32% in its recent quarter. Like many other stocks in this industry group, a breakout through the 200ma announced higher prices in the future. No guarantee, but we like what this group is doing post election. RSI is rising.
PACD is pushing through the 200ma. Most stocks exhibiting this pattern lately have continued higher. The company announced a beat of 101% on its latest quarterly report. MACD suggests momentum will continue.
Tidewater looks set to continue higher, on the back of this OPEC deal. SOTEMA is bullish. Also note the comment section of the Watch List for more.
Diamond Offshore is on our radar as well. We are watching for a flag or intraday pullback that we might scalp.
HOS is also on our radar. This one should continue. Stops below the 200ma. Volume suggests institutions are busy pushing this stock higher.
The watch list is below. Note the comments section. Do not chase these candidates, as the prudent investor trader waits for price to come to them.
Happy Monday.
Vinny
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