NFTRH eats its own cooking with Energy [w/ edits]

With reference to the vigorous bounce in the Energy sector (plus 7% today after yesterday’s rise)…

xle

NFTRH had this to say in an impromptu Energy segment over the weekend in NFTRH 597. Eating my own cooking, I have positions in XLE, CVX and XOM. [edit] Profit taken on XOM, w/ XLE & CVX still held. [edit 2] and CVX makes two, given stock market’s increasing risk profile and what oil is doing.

As a side note, this view on Oil/Energy also combined with indicators we reviewed in the Sentiment segment, fueling my suspicion that stocks were going to hold support at the equivalent of SPX 2450 and rally again. Markets are like a multi-faceted organism in the way their disparate elements can lay odds on a certain view.

A continued bounce in the Energy sector?

I have received numerous questions about Energy all through its bear market. I assume that is because ‘PEAK OIL!!!!’ promoters did a fine job of ingraining this sector into the public consciousness. It still feels to me as though many people believe the Energy sector will again rise to preeminence soon enough. I don’t necessarily believe that, but it does appear capable of a tradable bounce in the short-term.

Crude Oil was hammered by words and actions from Russia and Saudi Arabia and now it is bouncing due to words and actions from same regarding output cuts.

The daily chart of the Energy SPDR remains in a bounce posture after logically halting at the EMA 20. Should it break through the EMA 20 the objective would be to test resistance that resides at a gap fill and the hard down sloping SMA 50.

For so long now NFTRH has dismissed Energy and frankly, I am still not bullish on it. But I do think there could be a ‘bounce’ play here of +/- 30% if the Saudis and Russians manage to manipulate the oil price and the broad market bounce persists.

xle

Here is a weekly chart of XLE as well as a bearish weekly chart of WTI Oil, which bounced a whopping 31% last week and could have another 40% or so to bounce while maintaining its bearish big picture. Aside from any speculations in this sector, it makes me wonder if a continued bounce in oil, if it happens, could keep the stock market’s bounce going in the near-term.

xle

wti crude oil

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