CRR a more volatile RES

CRR and RES are both in the same sub-industry group, Oil and Gas Equipment Services. CRR had pretty good correlation with the sub industry group, but something went wrong recently.

CRR in green vs the Sub-Industry group (red), something went pretty wrong in 2012. Even the Industry (Energy) comparison looks similar.

 The daily MoneyStream is at a deep leading negative divergence, these signals are rare on Money Stream, yet this still looks like a tough trade with the volatility, but if you can keep your risk low either through a tight stop or a wider stop and fewer shares, the volatility may pay off as CRR is very close to a major support area.

On a 5 day chart, you can see there is a primary downtrend in place, it's not a textbook example, but it is a primary downtrend. RSI was negatively divergent at the top. What is interesting is how much volatility has picked up since the stage 2 mark up (up trend) and since the top formed.

 I created this custom indicator to show you the changes in volatility on a weekly basis, it started out with about a $3 low to high swing per week, then in the trend around $6.00 pretty consistently, then jumped to $20.00, normally we see this as a stock's price rises, but this is in a primary downtrend with falling prices.

 This correction could be described as an island top and the fact that the breakaway gap hasn't been filled is VERY bearish, we almost never see that anymore. As you can see, CRR is very close to making a new low, that's important within the context of the primary downtrend, suggesting the next leg down will head for the bottom of the channel.

 Using the X-over screen on a multi day chart, we can see the confirmed sell/short signal and a recent pullback to the 10/22 bar averages.

 3C weekly showing the accumulation stage, mark up and then distribution. It is now leading negative just like Money Stream above. This isn't a stock that is being bought, but sold/short aggressively. We need to keep an eye on Energy services as well as these two stocks could be a leading sign of what's to come in the sub group and probably the main industry group of Energy as well. If services falter, that tells us the larger Energy complex is in trouble.

 As we almost always see, this 15 min chart of the correction shows a head fake move, we almost always see a head fake move to trap longs/short -in this case longs, right before a reversal in trend. The red trendline is the area where it makes new lows.

 On a daily swing basis, it's a short and has been so since the first red candle in the series, as for a tight stop, the volatility stop at 103.31 is about as tight as you can get with this volatility.

Longer term if we apply the same layout to a 5 day chart, the stop is at $115.59. It's hard to say how to play this one, except to say that a break below $90.41 is probably worth investigating.

The Primary Channel would suggest a next leg down move to the $50-$60 area.