Energy stocks CRC and MDR are rallying back from brutal selling earlier in the week
The energy sector is lighting up again today, thanks to well-received headlines for oil-and-gas name California Resources Corp (NYSE:CRC) and oilfield engineering specialist McDermott International Inc (NYSE:MDR). Both stocks are making big moves higher in early trading, regaining some lost ground after heavy losses earlier in the week.
Specifically, CRC has popped 17.9% this morning to trade at $11.68, after a company spokeswoman last night denied media reports that advisors had been brought on for purposes of restructuring or deleveraging debt. "As discussed on our earnings calls, we are actively looking at asset sales, royalty monetizations and other transactions similar to those we have done in the past to help us delever," said a statement provided to StreetInsider.
After plummeting 29.5% yesterday -- its biggest one-day drop since February 2016 -- CRC stock is once again on the south side of its 50-day moving average, despite today's opening bull gap. Prior to Thursday's massive sell-off, California Resources shares had strung together a three-day win streak atop this trendline on Saudi-related tailwinds -- their longest such run above this moving average since mid-July.
As for MDR, the shares got hammered for a 63.3% loss on Wednesday -- their worst day in at least a decade -- followed by a 26.9% plunge on Thursday, on similar reports that it had hired Alix Partners to guide a company turnaround. Today, however, MDR is trading up 62.7% at $2.57 out of the gate, bolstered by news that the company has attracted takeover interest in its Lummus tech business -- which could fetch up to $2.5 billion.
This rally is pushing MDR off its freshly tagged 16-year lows, and dragging its 14-day Relative Strength Index (RSI) out of its latest trip into oversold territory. McDermott stock's RSI settled Thursday at a one-month low of 23.4, just eight trading days after this metric crested above 62.