No sector was spared in the stock market bloodbath this week, but there might still be hope for a bounce on EOG shares.
Check out this trend setup!
EOG Resources Inc (EOG): 4-hour
The energy sector was also badly hit by the brutal market selloff on Monday, but it looks like this commodity company could stay afloat.
EOG Resources Inc is involved in the exploration, development, production and marketing of crude oil and natural gas, both of which are highly in demand right now.
With the EU starting to reduce its reliance on Russian commodities ahead of an actual embargo by the end of the year, the region has been sourcing some of its LNG from Uncle Sam.
This means that local inventories could stay limited while production tries to keep up with increased purchases, likely lifting prices of energy commodities. In turn, this could translate to higher revenues for EOG down the line.
This is probably why the company’s stock continues to trade above an ascending trend line that’s been holding since the start of the year. EOG shares look ready for another test of support, which lines up with the 50% to 61.8% Fibonacci retracement levels.
Also, these happen to span an area of interest or former resistance zone that might hold as a floor. It’s near the dynamic support levels at the moving averages, too!
The 100 SMA is above the 200 SMA to confirm that the uptrend is more likely to resume than to reverse, but Stochastic has room to head lower. This suggests that the correction could keep going until oversold conditions are met and buyers are ready to take over.
If any of the Fibs hold as support, EOG shares could bounce back up to the swing high and beyond. Better keep your eyes peeled for reversal candlesticks if you’re hoping to go long!
