Oil Driller May Face Downside Risk
Marathon Oil has staggered along with other energy stocks in recent months, and now traders may see risk of a selloff.
The first pattern on today’s chart is the series of lower highs since mid-November while prices bounced at or near $26. A potentially bearish descending-triangle pattern has been the result.
Second, consider how that triangle began soon after MRO failed to break $33. That may represent a double-top combined with the peak from late May.
Next, the 50-day simple moving average (SMA) has been falling toward the 200-day SMA. Is a “death cross” around the corner?
Speaking of moving averages, this chart includes our 2 MA Ratio custom script. It shows the default settings of the 8- and 21-day exponential moving averages (EMAs). Notice how the faster EMA has been under the slower EMA for most of the last three months.
Finally, MRO has traded in a tight range and just completed a bearish inside week. That may allow volatility to increase if a directional move begins.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the series of lower highs since mid-November while prices bounced at or near $26. A potentially bearish descending-triangle pattern has been the result.
Second, consider how that triangle began soon after MRO failed to break $33. That may represent a double-top combined with the peak from late May.
Next, the 50-day simple moving average (SMA) has been falling toward the 200-day SMA. Is a “death cross” around the corner?
Speaking of moving averages, this chart includes our 2 MA Ratio custom script. It shows the default settings of the 8- and 21-day exponential moving averages (EMAs). Notice how the faster EMA has been under the slower EMA for most of the last three months.
Finally, MRO has traded in a tight range and just completed a bearish inside week. That may allow volatility to increase if a directional move begins.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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