Time to Short This Oil Stock

HP has closed August with a win once in the last 10 years

The broader equities market is set to end the month of July with impressive gains, but the same can’t be said for oil and gas stock Helmerich & Payne, Inc. (NYSE:HP). The shares are pacing toward a 4.4% July loss — their third monthly decline in a row — and if history is any guide, HP stock’s troubles could be far from over. In fact, the equity has only closed the month higher once in the past 10 years, landing it squarely on the Worst Stocks for August list. (While this insurance stock tops the Best Stocks for August list.)

On average, HP has shed 5.19% in August over the past decade — the second-most of any S&P 500 Index (SPX) stock, according to data from Schaeffer’s Senior Quantitative Analyst Rocky White. Based on its current perch at $60.92 — down 3.3% today as oil prices plunge — another loss of this magnitude would put the equity back near $57.76.

Looking closer at the charts, HP stock has been trending lower since an unsuccessful test of the $74 region back in May — an area that has kept a tight lid on the shares for more than a year. What’s more, the security breached its 200-day moving average earlier this month, and the trendline is on the cusp of forming a death cross with its 50-day counterpart.

Should Helmerich & Payne stock get hit again by seasonal headwinds, there’s room for analysts to downwardly revise their outlooks — which could create even more pressure on the shares. Of the 18 brokerages covering HP, four still maintain a “strong buy” recommendation, while the average 12-month price target of $67.91 is a healthy 11.6% premium to the equity’s current perch.