Oil and Gas Stocks Dominate the New Highs List

Continental Resources

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Source: TeleChart Gold

Continental Resources (CLR - commentary - Cramer's Take) is breaking out of a poorly crafted base on strong volume. The breakout "wedged" higher, which is not really bullish. I prefer to see nice round breakouts. Therefore, I want to see CLR build another flat or slightly round base that lasts at least five weeks. If it can do that, and then either bounce off the 50-day MA or breakout on higher volume, I would love to get long CLR.

Encana

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Source: TeleChart Gold

Encana (ECA - commentary - Cramer's Take) is breaking out of a long ascending base (best seen on the weekly chart) on very strong volume. If ECA can pull back on low volume to the 50-day MA, or build a five weeks or longer base on quiet volume, I would like to get long on the next bounce or breakout.

Stone Energy

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Source: TeleChart Gold

Stone Energy (SGY - commentary - Cramer's Take) is breaking out of a cup base on very strong volume. If this stock can pull back to the pivot point of the February breakout (the December highs) or the 50-day moving average on low volume, I would love to get long SGY.

Not only are these stocks in an extremely strong area of the stock market that is zooming up the list of top industry groups based on six-month price performance, these stocks all have beautiful bullish charts, and the growth in EPS and sales is extremely strong.

Every stock has an EPS rating of 81 or higher and an SMR (Sales, profit Margin, Return-on-Equity) rating of B or higher (EPS and SMR are proprietary IBD rankings). The earnings growth in every single one of these oil and gas stocks is very impressive, and that is definitely one of the reasons the charts are looking so bullish.

Not only are the fundamentals growing at an impressive clip, but the number of mutual funds that own shares in these stocks have grown in every single one of the stocks listed.

These are clearly the leading stocks I want to try to get long in this low-volume, go-nowhere market. It has been a little over a month since the market has gone anywhere, but these stocks are sure to go much higher. If they do not, my final cut loss will be a close below the 50-day MA.

Aloha from Maui!

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Natural Gas Services to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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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.