Are Energy Stocks Flashing a Buy Signal?

Oil-and-gas stocks once again reached selling climaxes last week

Aug 10, 2015 at 1:45 PM
facebook twitter linkedin

Last week, Schaeffer's Quantitative Analyst Chris Prybal took a look at selling climaxes. These weekly signals occur when a 52-week low is hit during a week, but the stock actually ends the week above its prior week's close. Prybal noted that selling climaxes can sometimes present contrarian buying signals.

Having said that, below is a list of stocks and other equities that reached selling climaxes last week. As you can see, the energy sector was once again well-represented -- among which was Transocean LTD (NYSE:RIG), a recent favorite among option traders. (Of course, extreme selling among oil-and-gas names is hardly surprising, given crude's prolonged sell-off.) In any case, RIG hit an intraweek (and 20-year) low of $12.07 on Wednesday, before closing the week at $13.57 -- above the prior Friday's settlement price of $13.26. Today, the shares are up 5.6% at $14.33, after Jefferies upped its outlook to "hold" from "underperform" and its price target to $13 from $12.


Also reaching selling climaxes were a number of CBOE Volatility Index (VIX) products. As Schaeffer's contributor Adam Warner touched upon earlier, the iPath S&P 500 VIX Short-Term Futures ETN (VXX) panned a record low on Wednesday, but took a sharp bounce to end on a weekly gain. Other VIX products on the selling climax list were the ProShares Trust Ultra VIX Short-Term Futures ETF (NYSEARCA:UVXY) and the ProShares Trust II (NYSEARCA:VIXY).

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners