The American company Forum Energy Technologies Inc. manufactures special oil field products for underwater, drilling, assembly, production and infrastructure sectors of the oil and gas industry. The company is traded under the abbreviation FET on the NYSE, and has been showing conspicuous weakness for weeks. In combination with the WTI crude oil overall market, an attractive short scenario is conceivable, which we will examine in this technical analysis.
Significant downward trend, many targets ahead
The daily chart makes it clear – here, the stock has been consistently punished for weeks now; strong, fast southward trend movements follow weak recovery attempts at low volume. On 18th April, the SMA200 was finally broken, and the current correction is generating an opportunity for a short entry.
We have drawn in three attractive targets in the percent area that is already at least into double-digits at the 1st target. In these zones, one should carry out partial sales and hedging.
Wait for a clean signal
As visible in the hourly chart, we are hoping for a further correction in order to make the 1st target more attractive. Since the oil industry is very closely linked to politics and news, in values such as these, one should look for more safety and wait for a clear signal. As drawn in, we are waiting for a trend reversal in the subordinate trend in the hour with an entry at a point 2, or from out of the following correction. In accordance with trend trading, the stop management takes place in the hour.
In addition, one should also observe the corresponding overall market before making an entry.
The daily chart of the oil kind WTI is showing a downward trend in a generally rather sideways chart image. If the trend picks up its movement here once more, we can also expect a trend continuation of the FET stock.
Before making an entry, one should take company news as well as news of the overall markets and the activities of the central banks into account. Particular attention should be paid to the upcoming OPEC Meeting on 25.05.2017 in Vienna, and only after this should one aim for a positioning.
Possible trading parameters
Entry: depending on the formation of the hourly trend, between 18-19 USD
Stop: depending on the formation of the hourly trend, above the last hourly high
Target: targets at 15 USD, 12.50 USD, 9 USD
Neither the author nor our company is invested in the securities and underlyings discussed at the time of publishing this analysis.
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