It is unusual for three stocks to behave identically, but a look at the three charts shows they pulled back on high volume and dropped significantly on November 28. On November 30, the three stocks broke out in identical fashion, then pulled back in identical fashion the next day. (See also: Devon, Marathon, WPX Have Similar Charts.)
As pessimism and optimism bounced back and forth about a looming announcement from OPEC on Wednesday, oil prices jumped higher on November 28, only to pull back. Note, however, that Marathon Oil, Devon Energy and WPX did not show any of the optimism and simply fell.
After the OPEC agreement was announced and all three stocks broke out, sellers came back in and brought the three stocks down. (See also: Which OPEC Country Has to Cut Their Oil Output?)
This kind of action often happens when a stock has not had time to form a proper base. A base gives buyers and sellers time to slug it out. Here we see that the battle was not over before the breakout.
The latest activity does not necessarily mean the breakouts are over. However, it is notable that on the day after the OPEC announcement, while most energy stocks soared, these three faltered.
This mini watch list is a strong opportunity for investors to confirm any decision about one of the stocks by looking at what the other two do. If one of these stocks breaks upward while the other two fail, it will be time to look at the fundamentals to see what is different about the winner.
It is also important to form a watch list of energy stocks that broke out successfully on the OPEC news. If some sellers step in, any pullback could be a buying opportunity. (See also: OPEC Reaches Deal on Oil, Futures Soar.)