Pullbacks in ConocoPhillips, Marathon Hint at Opportunities in Oil

While a number of oil stocks have gained ground in recent days – consider both Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL), up two days in a row – others in the group have remained under the control of sellers and are pulling back toward technically oversold territory. Among those oil stocks still trading above their 200-day moving averages are stocks like National Oilwell Varco (NYSE: NOV), which pulled back by more than one and a half percent on Wednesday to close lower for five out of the last six trading days.

Shares of NOV rallied to new, 52-week highs in the second half of February, and the stock has traded gradually lower in the weeks and months since. The stock’s choppy trading range with lower highs and lower lows has taken the NOV to its lowest level since late January.

The moderate nature of the selling has created a neutral, 6 out of 10, rating in shares of National Oilwell Varco, although the stock does have a positive edge of more than half a percent. Trading a few points outside of technically oversold territory, NOV could easily trade oversold by the end of the week on any follow-through selling.

For truly aggressive selling, look no further than ConocoPhillips (NYSE: COP). Shares of COP have finished lower for six days in a row heading into Thursday’s session, pulling back by more than 1% on Wednesday. COP has closed in oversold territory for the most recent three consecutive sessions, earning a short-term, positive edge of more than one and a quarter percent, and a 7 out of 10 rating, one point below “consider buying” status.

Also trading near the edge between bull and bear market levels are shares of Marathon Oil Group (NYSE: MRO). The stock traded in and out of oversold territory on Wednesday, edging toward the lower end of a trading range that extends back a little over two trading weeks. Shares of MRO have a positive edge of more than half a percent, and earned a one-point ratings upgrade to 7 out of 10 midway through Wednesday’s trading.

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David Penn is Editor in Chief of TradingMarkets.com