[Premium] Trade Of The Week

December 20, 2021

This week we’re looking at a short setup in the Oil and Gas space. We've seen growing weakness in the stocks of this sector and are looking at the setups here.

Let's take a look at what we have today!

The Oil and Gas space has displayed more weakness and Hindustan Petroleum looks like it will follow suit!

The price has been finding it difficult to get past the resistance at 320. Over the years we've seen the price make five unsuccessful attempts and roll over. This time has been the same. What is adding to the weakness is the failed breakout we witnessed recently. We also saw the price give up gains almost instantly, indicating the weakness.

The indicator too failed to make a higher high with the latest swing high and is now moving into bearish regime territory. All this along with sectoral and relative weakness is pointing at a negative move in this stock.

We are bearish below the risk management level of 320, with a target close to 235.

For those of you who are tracking another stock that's giving up its gains in this sector, this one is for you.

MGL has been the underperformer in this sector and continues to hold that spot. In the week gone by the price moved below the level of 900, initiating another round of selling. The indicator of course is already in bearish momentum.

We are bearish as long as the price trades below 900, with the first target near 805. A move below 805 could take the price lower towards 660.