We present a long idea in Helix Energy Solutions Group (HLX), a small-cap oil services company, as a way to capture near-term strength in the space:
HLX has seen a short-term breakout following a corrective phase within its long-term uptrend. The breakout is associated with positive short-term momentum and has taken HLX above its daily cloud (not shown), leading to an upturn in the 50-day (~10-week) moving average in a bullish short-term development.
HLX has improved intermediate-term momentum, and while the weekly stochastics are newly overbought, this is sustainable when intermediate-term momentum is positive. The weekly MACD is “pinched” and looks poised for a “buy” signal that would support upside follow-through.
Long-term resistance from the 2019 high can be used as an intermediate-=term objective for HLX near $9.90. A stop-loss can be placed below the 50-day moving average, currently near $7.00.
Helix Energy Solutions Group (HLX, $7.89)
Target: $9.90
Stop-loss: $7.00