There were 24 oil stocks in the IBD 50 on Friday. How do you distinguish between the winners and losers? And why does the screen continue to include so many oil stocks?
The market downturn and the volatility of oil prices have created a series of winners and losers and some stocks to buy among the IBD 50. Some are in new bases, while others tumbled below their 50-day and 200-day moving average, or hit sell signals.
That's why it's always a good idea to keep abreast of William O'Neil's CAN SLIM investing strategy. You can start your own research with the IBD Stock Checkup.
IBD's flagship screen of leading growth stocks gives you 50 companies showing strong relative price strength and top-notch fundamentals. And it ranks them for you. Before you decide what stocks to buy, always check out these new and innovative stocks that historically far outperform the S&P 500.
In this challenging market environment, oil stocks have soared to new highs and then plunged as oil prices came down. U.S. crude went from a peak $123.70 per barrel after Russia invaded Ukraine, to a low $87.41 Friday.
Look At Fundamentals, Accumulation/Distribution Ratings
Some of the big oil companies, like Exxon Mobil and Chevron, didn't make the IBD 50.
So let's start with the 24 oil stocks that have made the IBD 50. Take out any stocks that don't have an EPS Rating of 80 or better. That eliminates seven stocks. Then pare it down even further by eliminating stocks with an RS Rating below 90. Sorry Sonoco Products, that means you.
Then eliminate the stocks that have a C- or worse in Accumulation/Distribution Rating. Institutional buying can be key to separating the winners from the losers in a volatile market.
That leaves us with 10 oil stocks to choose from.
| Top IBD 50 Oil Stocks | ||||||
| IBD 50 Rank | Company | Symbol | Comp Rating | EPS Rating | RS Rating | Acc/Dis Rating |
| 6 | Comstock Resources | CRK | 99 | 97 | 99 | C |
| 12 | Matador Resources | MTDR | 99 | 99 | 96 | A- |
| 18 | Ranger Oil | ROCC | 93 | 97 | 95 | B- |
| 21 | Cenovus Energy | CVE | 97 | 80 | 96 | B- |
| 28 | Devon Energy | DVN | 98 | 82 | 97 | C+ |
| 30 | Equinor ASA | EQNR | 99 | 89 | 96 | C |
| 31 | Civitas Resources | CIVI | 98 | 97 | 92 | B- |
| 39 | Ovintiv | OVV | 99 | 86 | 95 | C |
| 42 | Occidental Petroleum | OXY | 99 | 80 | 99 | B- |
| 50 | APA | APA | 94 | 80 | 94 | B- |
The last step is to go to MarketSmith's chart analysis and look at the stocks that are in buy range or at least approaching their buy points.
Look At Charts When Buying Oil Stocks
Already, you can see a new handle has begun to form with a 21.28 buy point on Comstock Resources.
Matador is hugging the buy point from a cup-with-handle base.
Ranger Oil looks to be struggling. It has passed a couple of sell signals and now tries to make a comeback. Cenovus hasn't even been able to build a base, though it still trades above its 50-day line.
Meanwhile, Devon Energy looks poised to break out as it climbs the right side of a base. A handle is now forming.
Norwegian oil company Equinor has fallen out of its buy zone from a 39.25 entry and is noticeably weaker than the other oil stocks.
What Segments Of The Oil industry?
Civitas Resources plunged in June and July before starting to make a comeback. It appears to be forming a base. Likewise, Ovintiv is in a pattern with a depth of more than 40%, deeper than ideal. It is, however, well above its 50-day and 200-day lines.
Occidental Petroleum, a favorite of Warren Buffett's Berkshire Hathaway, is trading near the top of its buy zone off a cup-with-handle entry of 66.26.
It's too early to tell if APA is forming a base. Resistance around 40 is a level to watch.
It also pays to look at what segment of the oil industry is shining the most. Those stocks that have exposure to natural gas and to the oil infrastructure, as well as alternative energy, could benefit.
Follow Michael Molinski on Twitter @IMmolinski
