Market Outlook for New Year 2017 – Oil and Oil stocks
The Market for Year 2016 was a pretty volatile year with lots of bullish surprises, January 2016 many markets started badly with US oil dived into 13- year lows of $26.15 before rallied more than double to $53 at 2016 close, helped by the November Opec agreements to cut oil output since 2008, which also caused many oil and gas related stocks to rally from their lows in 2016.
As 2016 progressed, the 2 potentially black swans events (Brexit and Usa Elections) turn into “white” swans effect instead, with the unexpected Brexit rally and the ”Trump rally “ powering the Dow jones to new highs after Donald Trump unexpectedly got elected .
Will Oil & Oil Stocks rebound continue in 2017?
This will largely depend on 2 main factors; First is Opec members and its allies (e.g the Russians) need to adhere to the oil supply cut agreement they had in November. Saudi, the Opec leader seems to be leading by example in implementing the oil production cuts.
Click on the news article by marketwatch dated 5 January 2017 for more details.
Secondly is how the return of the USA shale oil players, given the oil rise for past few months will impact the supply of oil in the market. If oil can maintain a price range of between $40-$60, this could provide support for the oil stocks.
Keppel Corp rallied about 25% from its Jan 2016 low $4.64 to its 2016 closing price of $5.79. The Stock is now above its mid-term 50 day moving average and long term 200 day moving average, which may suggest the stock may be on a uptrend having rally from the bottom formed last year.
It is currently slightly below its horizontal resistance of $6.15, with $6.31 as the next strong resistance, which the stock needs to break above to have further upside in the mid-term.
Semb Corp Marine
Sembcorp Marine rallied about 13.5% from Its September 2016 low of $1.215 to its 2016 closing price of $1.38. The Stock is above its mid-term 50 day moving average and is now at its long term 200 day moving average of $1.51 which is also its horizontal resistance.
If it can break and maintain above this $1.51 level, this may signal more upside for the stock in the midterm.
Ok folks that’s all on Market Outlook for New Year 2017 for now.
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Following up from our previous post of sembcorp marine , it did attempt to break the downtrend line of 1.48 and even its 200 days moving average but failed to stay above and had some retracement. But we’re still looking at it as on the weekly chart as it has broken above the downtrend line on the weekly chart.
Also, Opec and non opec agree on first global oil pact since 2001. (http://www.wsj.com/articles/opec-russia-upbeat-about-securing-oil-output-deal-as-meeting-begins-1481362580). This could spur oil prices up and we might see sembcorp marine moving up too. Our entry might be 1.485 and a stop loss of 1.42. Our first target 1.515 then 1.59
Sembcorp marine rising to hit the downtrend resistance. Now all eyes would be on OPEC meeting starting tomorrow and if there is a cut or stop in production this might be a catalyst for oil stocks to move up. We’ll considering going long once that downtrend line is broken at 1.485 . Stop loss can be at 1.435
Sembcorp ever since our previous post on 24th jul has been coming down and finally close at 2.85 today. We’re hoping it test then 2.8 support then head to 2.6. Still looking bearish for us.
Sembmar ( SMM for short) since last friday as it broke the 150 support started to come off and down to 1.435 today. It reported its result this evening (http://www.sembmarine.com/scm2016/wp-content/uploads/2016/07/SCM2Q2016-PressRelease-28July2016-1.pdf) . Results wasn’t fantastic Q2 profits down 90% from the same period a year ago. We’re looking at 1.40 then 1.30 eventually.
Keppel Corp also down from when we posted, though alittle late but better late than never right? On track for 5.20 target
Sembcorp mar , it pushed below its major support of 1.505 level and currently still below. it was testing 1.505 level a couple of times and finally cracked below. This signal weakness and with that we would a short position could be made at 1.485 with a stop loss at 1.52. It’s results will be out on 28july will it suffer the same fate as keppel corp? Lets stay tune. For now sembcorp mar is weak to us.
Sembcorp Marine, it formed a bullish harami yesterday on 6th april and one would kind of expect price to move up the next few days but it didn’t hence it caught our attention. And oil rebounded the night before but sembcorp marine didn’t rebounded as expected. So it might be worth pay attention to this stock
Today’s candle looks like a bearish engulfing one which might signal more downside to come. We would short at any price below today’s low and a stop loss of either 1.60 or 1.64. Targets we are looking at might be at 1.47 then 1.39.
Sembmarine testing the downtrend line and closed right at it. With oil recovering in US trade we could see it finally break above that downtrendline, it tried to break it on friday but came back down at closing. If it manages to break above and stay above that downtrend line we might see it test $2.55 in the coming days.