Oil and Gas Stocks Dominate the New Highs List

Recently oil and gas stocks have taken off, climbing higher up the list of Investor's Business Daily's 197 industry groups based on six-month price performance, as they now make up five of the top 20 groups.

However, most of these stocks have blasted off without setting up in solid bases that offered high-reward/low-risk purchase points. Instead, wedging or low-volume rallies have taken most stocks to new highs where they then started to rally further on heavy volume.

This has helped create a lot of beautiful charts in this group that now have very bullish patterns to work with. If we can get some of these leading stocks to pull back on low volume, I am sure there are a few gems in here that could produce some very strong gains for us, even if we do fail this below-average-volume stock market rally.

Let's take a look at some oil and gas stocks, which not only have very bullish charts, but have extremely strong fundamentals (all have an EPS rating of 80 or higher), I would love to get long.

I have circled areas on the charts that show the important phases of accumulation that helps make these charts stand out.

Chart Industries

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Source: TeleChart Gold

Chart Industries (GTLS - commentary - Cramer's Take) is breaking out of an improper double-bottom pattern on very strong volume. If GTLS can pull back to the 50-day moving average (MA) or set up and break out of a base that lasts at least five weeks, I would love to start a position.

Natural Gas Services

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Source: TeleChart Gold

Natural Gas Services (NGS - commentary - Cramer's Take) is breaking out of a cup pattern on very strong volume. If NGS can pullback to the 50-day MA on low volume and then bounce on heavier volume, I would love to get long this stock.

Cimarex

Click here for larger image.

Source: TeleChart Gold

Cimarex Energy (XEC - commentary - Cramer's Take) has blasted off out of an odd chart pattern on strong volume. The rally has been beyond impressive, but the base the stock is coming out of is so rough that I would like the stock to set up in a nice quiet low-volume base lasting at least five weeks before looking to go long again. If it then can break out on higher volume, I would love to get long.

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At time of publication, Hayes had no positions in any of the stocks mentioned in this column.

Joshua "MauiTrader" Hayes is CEO, president and founder of Big Wave Trading LLC, a Maui, Hawaii-based stock market advisory service. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Hayes appreciates your feedback; click here to send him an email.