Trade Ideas Newsletter 04/08/2016

HP is positioned for a contrarian breakdown

Based on the above analysis in HP, traders should verify that their portfolio can handle increased risk from an additional position. Also ensure that HP improves diversification in your current portfolio. Lastly, clever traders check how a new position matches up with not just their account, but the previaling market action as well. For example, take a look at the S&P 500. Is it moving to the upside or downside? Has it recently broken a key ceiling or floor? Be sure to line up your trading actions on HP with the trend in the overall market.

CHART

Right now the proprietary sentiment levels, calculated by Traders For Wealth, indicate an suprisingly positive bias toward HP. However, the price action in HP has been moving down contrary to the sentiment. This could be a strong sign of an impending contrarian breakdown. Traders should view this as a bearish position and make sure it is confirmed by overall market action, and in line with their current portfolio.

Helmerich & Payne (HP)

Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three business segments: U.S. Land, Offshore and International Land. Its U.S. Land segment operates drilling operations in Oklahoma, California, Texas, Wyoming, Colorado, Louisiana, Mississippi, Pennsylvania, Ohio, Utah, New Mexico, Montana, North Dakota, West Virginia and Nevada. Its offshore operations are conducted in the Gulf of Mexico and Equatorial Guinea. Its International Land segment operates in seven international locations, including Ecuador, Colombia, Argentina, Tunisia, Bahrain, the United Arab Emirates and Mozambique. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology.