In this afternoon's Midday Market Update, my colleague Jocelynn Drake noted that the price of crude futures had fallen more than $4.50 to trade below the $50 level. I initially thought that this drop in oil, along with other commodities, was the reason that Cabot Oil & Gas (COG: sentiment, chart, options) had dropped and it certainly is one reason, but it isn't the main reason. The oil firm was downgraded to "equal-weight" from "overweight" at Morgan Stanley. The brokerage based the downgrade on the stock's recent outperformance, increasing execution risk, recent production misses, and a more cautious near-term view on natural-gas fundamentals.

COG does seem to have found some support in the 25-26 region, and it has also managed to finish above its 10-week moving average. The problem is, this trendline is dropping at an alarming rate, and the stock isn't straying very far from this trendline's gravitational pull. However, if the stock continues the plunge started today, we could see this moving average put in position to act as resistance. Unfortunately for the shares, they have had quite a bit of experience battling with this trendline's resistance, as the last 2 weeks have been the first since June that COG has closed atop its 10-week moving average.