Conoco Phillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. The company primarily engages in conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations.
Conoco Phillips oil and gas is dropping strongly like many other oil-related stocks and following the strong sell-off that has happened in the last months on Crude Oil and Brent Out futures. This stock is highly correlated with Crude Oil so no longs are allowed, moreover if we look at this stock wearing supply and demand glasses.
As you can see in the monthly timeframe below, a strong supply imbalance was created in Conoco Phillips, around $60 per share. The strength of the bearish impulse is pretty strong, similar to other imbalances created in other oil-related stock companies. The analysis on the monthly timeframe is pretty simple, monthly downtrend, new strong supply imbalance, no longs are allowed, only shorts.
I’ve read that some investors were thinking of buying shares of ConocoPhillips (COP), LUKOIL (LKOH), Chevron (CVX), Exxon (XOM) and Royal Dutch Shell (RDS.A); well, as supply and demand traders, it’s very clear that we should not be thinking of buying shares these oil-related stocks for a very clear reason. In a downtrend, new supply imbalances are created and demand is eliminated. Why should we buy if new supply is being created and the stock is dropping like a rock following suit the highly correlated prices of Crude Oil (CL)? It makes no sense, which is why most traders fail to understand and accept it.
As supply and demand traders, we should not care much if Oil plunges after failing to reach a deal, or the existing oil wars and fights existing between Opec, Russia, Arab countries and the US. Oil is trading lower after Saudi Arabia slashed crude oil prices. Still, if we take a look at Royal Dutch Shell’s monthly timeframe and other oil-related stocks worldwide, we will see that it was the most likely direction the oil-related stock could move since we had a weekly supply in control and a clear downtrend and bearish bias.
Remember that a single timeframe is not enough to make a trading decision. You must put the new imbalances into context and only trade them if a multiple timeframe analysis has been done following supply and demand rules.
This is the kind of price action technical analysis you will learn in our trading community. You will learn how to locate new supply and demand imbalances and trade without using any indicators, no news, no fundamental analysis, no earnings announcements, no volume or VSA analysis. Just supply and demand imbalances.
Trading supply and demand imbalances are ideal for beginners and those with full or half-time jobs. You won’t need to stay in front of the computer all day long trying to move price action with your mind.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and react strongly to those imbalances. Why do you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances in gaining control.
You should not worry about fundamentals or earnings announcements unless you are doing very short-term trading and scalping.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name, and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for the price to pullback or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
Join our supply and demand trading courses if you want to learn how to trade the markets using our supply and demand stocks trading strategy.
There are several ways of buying stocks and futures. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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