Oil prices are rising, finally, after crumbling in late April. Pressured by tensions with Iran, oil bulls suffered mightily in Q2 while bears happily watched oil ETFs crater.
Many of them almost fell to their lows of 2018 – which, by the way, was a downright disastrous year for the energy sector following the Fed’s rate hike.
But now that things are “looking up” (in more ways than one), renewed optimism and interest has returned to the industry.
Particularly for a few major players, most of whom are making a comeback.
Outside of the mainstay oil firms, though, there are a few companies that have yet to be noticed. Yes, many of them are smaller organizations and don’t necessarily command high market capitalizations.
But there are others still that simply haven’t shared in the sector’s recovery over the last few weeks, primarily because they don’t just deal in oil.
And while running some analysis this morning, I came across an energy stock that fits into that “bucket” perfectly and appear poised to rally.
Just a few weeks later than their counterparts.
In the weekly candlestick chart above, you can see that Cabot Oil & Gas Corp (NYSE: COG), an oil and natural gas company, is sitting in a great spot for traders.
A higher low (relative to the low of late 2019) was set just a few weeks ago, when COG sold off well below the lower Bollinger Band (BB). Moreover, the stochastics were absolutely buried, suggesting that investors woefully oversold COG following the late-April energy sector panic.
Now, however, things are starting to turn around. That recent contact with the lower BB now serves as a launchpad for COG shares moving forward, and a candlestick close last week above the last 3 candle bodies gives us confirmation that a short-term uptrend could be forming.
Back in 2018, you can also see that COG replicated the current situation in many ways. There was a steep sell-off in late-November/early-December, and once a low was established, share prices took off.
COG went on a tear over the next month, before chopping sideways for a few weeks. It was a great long trade by every stretch of the imagination, even without contact with the lower BB or a super-low stochastics reading.
This time, we have both of those indicators present. To me, that means that if COG does end up fulfilling the roadmap we’ve laid out here, it could rise both higher and faster than it did towards the end of last year.
And that’s certainly something worth getting excited about.
Even if you’ve already made a few bucks on the sector’s blue chip oil stocks over the last month.
