Energy: It’s the New Black Gold
Below is another chart fusing together the technical backdrop for the Energy Sector (chart by my partner Arun Chopra) with some fundamental bullets listed below (by myself). If you like our work, check out more on our new premium site. Today we look at the big rally in the Energy Sector (NYSEARCA:XLE).
Energy stocks have caught fire on the heals of OPEC, +$50 crude oil, and the broader market rally. But the Energy Sector rally isn’t without its concerns. Here are a few bullet points on things that we are watching and what the chart is saying:
- Energy stocks have broken out as both OPEC and non-OPEC members have agreed to production cuts.
- The breakout is also on good volume…but internals still lag and valuations are very high vs. history and vs. intra sector.
- And, bullish sentiment is at extremes with bearish seasonals coming up in January as well.
No doubt, it’s breakout for the energy sector, but internals, valuations, and extreme sentiment could set up bull trap. We’ll keep an eye out and keep you updated.
Thanks for reading.
Twitter: @JBL73
The authors may have positions in mentioned securities by the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
