SOCA trade ideas
Another bullish count in oil stocksThis time it is Subsea 7. I wonder what it should be to make subsea engineering stock skyrocket in such oversupplied market? War in the Middle East?
SubSea7 (Norway): New DowntrendPressure within the European Oil&Gas Sector is paramount. Virtually everywhere stocks are tanking or showing flimsy holding patterns at best. SubSea7 has been a big outperformer within the sector, but that seems over now. Prices have set a new lower peak below the previous consolidation pattern. Cloud support has been taken out to the down side and, as mentioned before, sector weakness is widespread.
We expect a decline towards minimally 92.10 (pattern projection). Below this level some pivots of 2015-2016 could give some support around the 85-zone. In either case considerable down side risk. Avoid all long exposure. Trading short-entries are justifiable with initial stops above ~121.50.
Primary trend: negative
Outlook: new down trend, negative
Strategy: avoid or trading short-entry
Support: 106.70 / 92.10* / 85-
Resistance: 121.50 / 124 / 134.50+
Outlook cancelled/neutralized above 121.50
CHXEUR:SUBCO
SUBSEA - sell overvalued cash positionSubsea 7 has a big short position by various high-end funds in the SSR registry with the financial authorities of Norway. Technicals look promising having finished a big w-formation while hitting the top in its current channel. Short term double top, with a break of trend seem to chart the course for 100NOK target where first solid resistance come into play. The company has a big cash position which seems to have been a safe bet during times of crises but it's highly likely it has provided a pile in of sector exposures which like will head for a reverse given all the other goodies in the sector now having cleaned up and re-shaped their stock and balance sheets. Short-term put options look cheap (107,50 strikes).
