ENERGY THOUGHTS

/7 Comments/in /by

I noticed something of interest in ENERGY today and wanted to try to post here

 

Buying out of possible lows/ bottoms  can be both high risk  (Catching a falling knife Bottom)  and they also can be quite profitable.  Recently when OIL was above $60 I said I wasnt comfortable with OIL / ENERGY , because of the way it was dropping.  It didnt look finished.    SO its tricky short term, but the  XLE looks to be producing a reversal that is Bullish in nature if it closes here. Its a BULLISH ENGULFING and other Energy stocks also have strong action lately.

 

XLE

 

Other ENERGY stocks are so beaten down that they are up 15 to 20 % ( Like a 3X ETF)  and yet they hardly look like they’ve moved on the chart .  You see that on  EXXI below.  Some of the energy stocks may rally fast with short covering and a reversal in OIL.  They can be trade able for fast traders,  or they may set up as BUYS soon if they rest, pullback, etc

EXXI

EXXI

 

TPLM has had big moves ( 70%  pop off of lows)  that dont look that big on the charts too. CAN IT BREAK ABOVE RESISTANCE SHOWN?

tplm

 

WG is up 30%  & Breaking from a wedge, but also has the  50 sma overhead

WG

 

SFY – I like a little more follow through vs  1 day wonders, because of the false starts that have occurred in some.  Notice SFY

SFY

 

SWN is also a bullish engulfing if it closes above yesterdays highs.

SWN

 

SO I know some here have asked about ENERGY / OIL in the death throws and do I plan on trading it.  Back then I said it didnt look interesting, but today I would have to say that things are getting interesting. Some of these have dropped from the $20’s to single digits in what seems to be an OVERDONE move.  IF OIL bounces and goes sideways and cant surge higher, it may double bottom or even move into the low $50’s in the futre, right now it is in the timing for a meaningful low, so looking for LONG energy plays may pay off too.

 

I AM NOT WANTING TO CONFUSE ANYONE –  I know some readers want tech stocks,  some want Miners,  some want ENERGY ,  some want ALL sectors that look interesting.  so I am sending this out to show an opportunity that may be happening in THE ENERGY SECTOR. I am not saying , “Hey , we were looking at Miners but now go 100% energy”.  Nothing of the sort, I am still watching how the GOLD cycle plays out.

 

The general Markets have reversed today and look good too, so there may be some trades to speak of there for traders.

I had posted this DEC 10 as a target

QQQ Dec 10

 

Here we are now with a reversal

qqq dec 16

 

SO the MARKETS  (Cycle wise)  Should run to new highs if this is the lows of the recent sell off.  It looks oversold enough to be lows and the timing is in line with it too. ETF traders could buy todays reversal  with a stop below the 50sma on QQQ  or 50sma on SPX.    The FED MTG is tomorrow….some may wish to wait.  Choose stocks wisely if you are a trader  GOOG , NFLX, AMZN and a few other high flyers broke down sharply recently.

 

This update is just to say that Energy may be bottoming.   Is it just a trade-able Temporary type low?   Long term?   V-Bottom?   Base out?   That all remains to be seen and we will watch it going forward. There may be some nice set ups if the lows are in. Traders here may start looking for stocks just rising up off of their lows and make a few trades, or moving above recent bases , etc but FED WED could make things whippy if you choose to buy & Hold.

 

~ALEX

7 replies
  1. Geurt.
    Geurt. says:

    Thanks ALEX…… You said: “I know some readers want tech stocks, some want Miners, some want ENERGY, some want ALL sectors that look interesting”. You know what ALEX…. I like to make money on where the money flow is going, thus what sector we can make money? Not all to much risk? Thank-you for your help.

    • chartfreak1
      chartfreak1 says:

      Yes, I agree – That is what we all want , low risk – with good upside potential. I think the hard part ( Not for You, I mean in general) is trying to wait patiently for that good set up. A Set Up that can reduce downside risk with a stop a little below .

      Some really good traders will wait without being invested for a whole month or more for that “Oil Set up” or “Gold set up” or “Tech Stock Set up” to actually arrive where it should turn & actually ‘set up’, instead of trading something different every day.

  2. Wishfullthinkin
    Wishfullthinkin says:

    Increadably tricky day. Just watching ( and learning ) from sideline. Going to wait for Fed to have their say before I look for set ups. Watching charts today is like watching a game of ping pong! Don’t know how you keep your sanity Alex.

    • chartfreak1
      chartfreak1 says:

      It is crazy. I barely remember a day like today with so many directional moves, then reversals, then reversing back. Yes, like a ping pong game!

      OIL & the General Markets are due for their lows. GOLD is due for a daily cycle low, and the dollar might be due too. Add to that Year end selling and other Mkt events – THAT is a recipe for volatility. : )

  3. Cason
    Cason says:

    Yeah tried my hand at SPY early day but stopped myself out in afternoon fade. Risk tolerance very low for me right now so when saw setup wasn’t where I thought it was I jumped out and will wait for Fed clarity. Santa Claus where are you? Thinking we still get low volume up next few weeks – B wave up and then C down after that gives 50-61.8% retracement of Oct bull and sets up for next run at highs. It’s a concept.

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