Group Overview:

  • Energy has been a standout as of late with both the exploration and equipment sectors behaving well. The XLE and OIH are both enjoying current 4 week winning streaks, and the XLE was the best performing major S&P group advancing 1.9%. That action, with the rising price of crude, is having adverse effects on other groups like the cyclicals, which have consumer discretionary names among them (the XLY lost 4.2% this week in the second largest weekly volume in nearly 2 years). The OIH still has plenty of room to make up being off 14% from most recent 52 week highs, as the XLE sits just 3% off its own. But the drillers are narrowing the gap as their combined advance during its present 4 week winning streak is 10.1% compared to the XLE higher by 5.9%. And perhaps more impressive is that the OIH is rising despite the rig count falling for a third consecutive time this week. Directly below is the performance chart of the five equipment and services names we highlight today and how they compare with each other since last December.

Special Situations:

Sits just 2% off most recent 52 week highs, a solid stat in a group that has lagged exploration plays until recently. NE is higher by 58% YTD and over the last one year period. Earnings have been mixed with gains of 1.1 and 6.2% on 5/3 and 2/22 and small losses of 1.5 and .5% on 8/3 and 11/3/17. The stock is on a 4 week winning streak higher by a combined 23%, and is trading at levels not seen since the first week in March of 2017. Since the week ending 4/6 it has produced seven double digit weekly gains, compared to one loss. It is acting well POST breakout from a 6.94 cup base trigger taken out on 9/24. Enter NE with a buy stop above a bull flag trigger of 7.25 which carries a measured move to 9.

Trigger NE 7.25.  Stop 6.85.

Despite the ill received earnings shortfalls stock just 3% off most recent 52 week highs. RDC is higher 20% YTD and 44% over the last one year period. Earnings have been mostly lower with three consecutive negative reactions falling 6.6, 5.2 and 7.9% on 8/1, 5/1 and 2/28 after a small gain of 1.3% on 11/1/17. The stock missed a five week winning streak this week as it dropped just FIVE pennies. That could be forgiven as it jumped 31% the prior 4 weeks, with all four CLOSING well into the upper half of the weekly range. Enter RDC with a buy stop above a bull flag trigger of 19.25 which carries a measured move to 26.

Trigger RDC 19.25.  Stop 18.30.

Building right side of long cup base that began close to an ugly 20 of 22 week losing streak the weeks ending between 2/10-7/7/17. ESV is higher by 43% YTD and 45% over the last one year period and sports a small dividend yield of .5% (the only one of the 5 stock profiled today that does). Earnings have been mostly lower with three straight losses of 6.1, 6 and .8% on 4/26, 2/27 and 10/26/17 before a recent gain of 6.1% on 7/26. The stock is on a 4 week winning streak gaining a combined 29%, and has doubled since the first week in April. It is acting well POST breakout from a 8.10 cup base trigger taken out on 9/24 that rose more than 5% in huge trade. Enter ESV with a buy stop above a bull flag trigger of 8.70 that carries a measured move 11.30.

Trigger ESV 8.70.  Stop 8.20.

Name playing catch relative to others down 9% from most recent 52 week highs, but decisive move above 20 number can get this name pumping. DO is higher by 7% YTD and 34% over the last one year period. Earnings have been mostly higher with gains of 2.5, 1.7 and 9.5% on 7/30, 2/12 and 10/30/17 and a loss of 3.3% on 4/20. The stock lost just 8 pennies this past week, a fine digestion of the prior 3 weeks which surged 22%. It has advanced 17 of the last 21 sessions, and is having issues with the very round 20 number presently. The name is prone to big runs as it rose 17 of 21 weeks ending between 8/25/17-1/12/18 that traveled from the very round 10 number to the 20 figure. Enter DO with a buy stop above a cup with handle trigger of 20.63.

Trigger DO 20.63.  Stop 19.50.

Ten years ago this name traded higher than 150. RIG is higher by 28% YTD and 30% over the last one year period. Earnings momentum is soft with three straight negative reactions falling 3.8, 2.7 and .9% on 7/31, 5/1 and 2/21 after a gain of 1.3% on 11/2/17. The stock fell 2.1% this past week, easily the worst performer of the five profiled names here, but it did rise 26% the prior 3 weeks and has shrugged off big volume double digit weekly losses of 14.3 and 10.4% the weeks ending 8/17 and 9/7. Since the week ending 5/13 it has been above 14 intraweek, but none of the five CLOSED above 14. Enter RIG with a buy stop above a bullish ascending triangle trigger of 14.35 which carries a measured move to 18.50.

Trigger RIG 14.35.  Stop 13.40.

Good luck.

Trigger summaries:

Buy stop above bull flag trigger NE 7.25.  Stop 6.85.

Buy stop above bull flag trigger RDC 19.25.  Stop 18.30.

Buy stop above bull flag trigger ESV 8.70.  Stop 8.20.

Buy stop above cup with handle trigger DO 20.63.  Stop 19.50.

Buy stop above bullish ascending triangle RIG 14.35.  Stop 13.40.

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