Futures for the Dow Jones industrial average, S&P 500 index and Nasdaq 100 were little changed early Wednedsay, after the major averages rose modestly on Tuesday.
While Dow industrials components Exxon Mobil (XOM) and Chevron (CVX) and many shale plays remain in sharp downtrends, BP (BP), Royal Dutch Shell (RDSA) and First Solar (FSLR) are among energy stocks that are approaching buy points. Crude oil prices rose for a fifth straight session ahead of OPEC's key meeting Thursday at which the cartel and key allies such as Russia are expected to extend production cuts for another nine months.
X Dow industrials were trading just below fair value. S&P 500 index futures were flat. Nasdaq 100 futures rose fractionally.
U.S. crude futures were little changed early Wednesday after the American Petroleum Institute said late Tuesday that U.S. crude and gasoline supplies fell last week. On Wednesday, the Energy Information Administration will unveil its official weekly petroleum stockpile and production figures.
The July U.S. crude futures contract, which is now the near-month contract, rose 0.7% to $51.47 a barrel on Tuesday. Even though energy prices have rebounded sharply in the past few weeks, energy stocks have not roared back en masse. Exxon Mobil is moving sideways near its recent lows. Chevron is pinned below its declining 50-day moving average. Shale plays such as EOG Resources (EOG) and oil services giants like Halliburton (HAL) also haven't found their footing.
But here are five energy plays that are faring well and near possible entries.
BP
The U.K. energy giant has been rallying strongly for the past month, building the right side of a base, though shares dipped 0.1% to 36.93. BP has a potential buy point of 38.78.
BP's relative strength line is well off recent highs, signaling the stock's underperformance vs. the S&P 500 this year. That's a common problem for energy stocks right now. Generally you want to focus on stocks that are outperforming the broader market and moving out to new highs ahead of the share price.
Royal Dutch Shell
The Anglo-Dutch oil and gas titan slipped 0.2% to 55.16 on Tuesday, but it's a saucer-with-handle formation with an entry point of 56.35. Shares have surged in May after Royal Dutch reported $9.5 billion in cash flow in Q1.
First Solar
First Solar isn't as closely tied to oil or even natural gas prices. But ultimately fossil fuel prices are a benchmark for solar power. The more expensive that oil and especially natgas are, the more economical solar is.
First Solar has formed a bottoming base with a 37.77 buy point above a handle. First Solar rose as high as 37.40 intraday Tuesday, closing up just 0.1% at 36.47.
SunPower
SunPower (PWR) rose 2.85% to 7.95 on Tuesday, moving above its 200-day moving average for the first time since early January 2016. SunPower is in a bottoming base, like First Solar, with a buy point of 9.29.
Marathon Petroleum
Marathon Petroleum (MPC) is a refiner and gasoline retailer. Marathon Petroleum is in a flat base with a traditional buy point of 54.69, just above its 2017 high. Aggressive investors could see 53.62 as a potential alternative entry.
Shares edged up 0.2% to 53.08.
In Asian trading, Japan's Nikkei climbed 0.5% while Australia's S&P/ASX 200 fell 0.1%. China's Shanghai composite sank 0.4% but that was off session lows.
Looking ahead to Wednesday, highly rated Lowe's (LOW) and Dycom (DY) report earnings before the market open. Lowe's, which recently fell below a buy point, sank 2% Tuesday to close below its 50-day line for the first time since early February. Meanwhile, the Federal Reserve will release minutes from its early May meeting in the afternoon.
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