Sellers are still well in control as the major indexes got rejected at their key moving averages on Thursday. S&P-500 futures are down nearly 2% tonight while crude oil gapped up a whopping 10% - not a good sign for the economic outlook. The geopolitical turmoil on top of existing inflationary pressures makes it no wonder that the S&P-500 is down nearly 10% this year.

As has been the case for many weeks, energy stocks are the place to be along with a high percentage of cash. Growth stocks are far out of favor and look primed for lower prices so I’m staying away for now.

Tonight I’ll cover updates on several energy stocks from last week as well as a few others that are setting up. Let’s get into it!

Index Update

The Nasdaq got rejected, clear as day, from the 21-EMA in purple and moved lower on Friday. Now futures are trading below the key support area in orange from January’s lows, so I’ll be watching closely to see if this area holds during tomorrow’s session. This tech-heavy index indicates that growth stocks are not the place to be.

The S&P-500 is faring slightly better than the Nasdaq but also got rejected from it’s 21-EMA and looks headed back down to test the January lows. Holding above the orange line would be good, while falling below it is bad. Keep it simple.

Portfolio Update

YTD Return: 3.99%

YTD S&P-500: -9.07%

My Positions

ConocoPhillips (COP) is a leading energy stock that broke out last week. I bought it at $94 and added on Friday at the close as it broke through $100. Stops at $97.50 on the new buy and at $94 on the first one.

Canadian Natural Resources (CNQ) crossed up through my $55 buy point on high volume last week. I sold half just above $59 on Thursday for a tidy 6% gain. Stops at even on the rest.

Laredo Petroleum (LPI) broke through my $80 buy point from last Wednesday’s issue on heavy volume and I got in around $81. It’s a really good looking pattern so hopefully it plays out. Stops at $79.50.

Global Ship Lease (GSL) passed up through my $27 buy point on its highest volume in 52 weeks. I took half profits when it broke into all-time highs at +6% and moved stops up to even on the rest. Those stops hit on Friday when the market sold off.

Best Setups

Cheniere Energy (LNG) crossed above the bull flag pattern and my buy point at $134 on above-average volume and closed 3% higher. I actually bought some on Thursday but sold it for breakeven as it wasn’t moving right away, missing out when it moved higher Friday. I’ll consider buying back in on a move above $140 if it doesn’t gap up too high tomorrow.

Earthstone Energy (ESTE) still faces a major resistance at $14. If it can break above this on heavy volume, I’ll be a buyer with stops $0.50 lower. I’ll look for it to show a profit right away as it can trade a bit choppy. Reports earnings 3/10, making it hard to size up on this as I don’t hold big positions through earnings.

Ovintiv (OVV) is a strong stock in oil & gas and looks like it may try for higher prices. The buy point is a move above $49 with stops $1.50 lower. A bit extended here so be careful, but oil shows no signs of stopping for the larger move.

Energy Vault Holdings (NRGV) is a renewable energy producer SPAC that’s setting up a nice pattern. It’s tightening up and printed an inside-day on Friday. The buy point is a move above Friday’s high at $13.25 on heavy volume with stops at the low of day at $12.70.

Lantheus Holdings (LNTH) gapped up on a powerful move with the highest volume in 52 weeks. Sell volume has yet to come into the stock so it could be ready for more. It printed an inside-day on Friday so the buy point is a move through resistance at $53 on high volume with stops at $51. I’d take quick profits on this to mitigate overnight risk.

Algoma Steel Group (ASTL) is a newer issue that volume has come into over the past few weeks and has formed a double-bottom W pattern. Steel is a group that’s working well at the moment, so the buy point is a move above $10.30 on high volume with stops just below $10.

That’s all for tonight! If you liked this column or have any feedback about the content, hit me up on Twitter with the link below or respond to this email.

See you back here on Wednesday night for an update on our stocks.

Cheers,

Danny Deals