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After all of the sideways chop, I think we finally have something interesting to talk about. 

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SPX –  If Oil could get moving higher, I think we’ll see the markets moving higher too.  After all of this sideways chop ( in many sectors), this is a bullish set up with todays strong reversal.

spx-9-28

WTIC – This is a solid break out, and even if you see OIL down on Thursday morning, I believe that it will have follow through. This would be day 6 of a new daily cycle with the blue arrow being a dcl. ( Edit: I think this is actually day 8, see next chart).

wtic-9-28

 

I posted this chart before to show that we did get a new low on day 30, which was Sept 16th.  For some reason, Stockcharts doesn’t show a new low on that day, but other charts do.  That allows for a DCL on the 16th.

oil-daily

UPDATED CHART –

crude-lows

So again, after coiling and building energy in this sideways move, Oil can run higher in a big way, especially if no one believes it. I have read tonight that plenty do not believe this move. This chart and the indicators are bullish.

wtic-9-28b

 

The XLE believes it, and this consolidation can also lead to a strong run higher. Follow through could be very strong, so a pullback today may give you an opportunity to enter a lower risk position.

xle-9-28

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I will discuss more on the energy sector at the end of the report.

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GOLD – This was interesting, because GOLD & SILVER both continued their sideways chop and they dropped down on Thursday.

gold-9-28

GDX – Why did Miners reverse so sharply? And I have been pointing out that several Miners actually look bullish with all of this choppy action. GORO, NG, RIC, etc.

gdx-9-28

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GORO – Does this look bullish or bearish?

goro-9-28

RIC – This re-gained the 50sma last week and held up on it this week.  I think that we are going to see some Miners being accumulated after that steep August sell off .  This is why a ‘core’ holding pays off. In bull markets, we do see surprises to the upside and this is quite surprising.

ric-9-28

SO Oil broke out yesterday and recently I have watched OIL turn higher and energy stocks didn’t follow along with conviction.  I reported earlier this week that OIL shot higher by 3%, but energy stocks did not. Look at the charts and you will see that on Monday OIL surged higher and the XLE was red.   Well on Wednesday,  Energy stocks DEFINITELY did surge higher with Oil, as we saw on the XLE chart.  I wonder if they will pull back this morning and offer a low risk entry?  I want to look at some Oil / Energy stocks now, because I do think that they are ready to run higher.

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~ALEX

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ERF – Low risk, with a stop below the support line. This might stall at the 50sma, but if Oil & Energy are ready for the next leg higher, it should not last for long. A pullback this morning may offer a lower entry.

erf-9-28

 

WPX – We have traded this in the past , along with RICE, REI, CWEI. That looked like a H&S, and then suddenly it takes off higher. The 50sma held as support and this is a bullish set up. A stop placed loosely under the 50sma is best.  You can see a slight break of the 50sma on some of these.

wpx-9-28

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AREX – I owned AREX and tightened up my trailing stop below the 10sma.  It dropped for days I sold it, but notice now that price is almost back up to where I got stopped out. Wednesday basically erased the last 10 days of trading, and I got stopped out about 12 days ago.  Amazing.  It was up 16 %, is it overbought here? NO. See the stochastics.

arex-9-28-d

 

AREX WKLY-  This weekly chart shows just how much potential AREX has. I doubled my money on this trade, and I think it could double again from here.  Maybe a pullback this morning allows me to enter near $3?

arex-9-28

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OAS –  I know, this surge was huge and many think that it is too extended to buy here. Waiting for a pullback is fine, or taking a partial position and adding it if it drops is too, but…

oas-9-28

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OAS WKLY – This has HUGE potential in the big picture.  Many people see the wiggles and get nervous on any selling, even when the big picture looks amazing.  Oas never really violated the 50sma, though it did close below it once.   I like to remind people to look at this potential.  

oas-9-28-w

 

PKD – After a long sideways consolidation of the gains from roughly $1 to $3.20, PKD is oversold and regaining the 50 & 200sma. Possible inverse H&S. 

pkd-9-28

 

SGY –  This could be very high risk due to fundamentals, but technically, it ran from $2.70 to $25 and pulled back to $8 and consolidated.

sgy-9-28

WLL – Breaking back above the 50sma with strong volume. 

wll-9-28

REXX–  Again, risky but still in business and breaking out from a weekly triangle double bottom low  🙂

rexx-9-28

 

AMRS, PEIX, BLDP, PLUG are energy stocks, but mor eor less clean energy.  I do like the set ups in these too.

amrs

POTENTIAL – Longer term, some of these energy stocks have great potential as seen on their weekly charts.   This is one that hasn’t been waiting for anyone. I remember recommending this stock and saying that it could easily run to $60 in the big picture, and now it is at $84.  Oh I wish I could have a ‘do over’ on this one.  I sold it under $30

cwei

So these are just a few ideas of what I am looking at in the Oil / Energy sector, and the longer term potential can be seen too, if they can stay in business and trim the fat / cut debt.  I think the break upward Thursday was real, and even if it drops back down inside of that triangle, I think that it can go higher from here. For more ideas, see the charts of ..

 

SDRL, ECA, DNR, BTE, OIL, PEIX, CHK, WPX, CIE, GST, PGH, EMES, WTI, PKD, GTE, NADL, PDS, CIE, TPLM, GST, NOG, etc.

Don’t buy overextended stocks that have already been running for days. Buy closer to  support or near the recent lows, so your stop can be placed a little below those levels.

106 replies
  1. Bill
    Bill says:

    I hope a new cycle has started, to save my account. I got locked out for 8 days while moving from TD to Merrill. Bad timing, took a draw down. My worry is that we say NUGT and other miners jump 21% last week, only to give it up. Fingers crossed. 😉

      • Bill
        Bill says:

        TD was charging me $10 a trade. Merrill will give me 30 free trades a month, plus $6.95 a trade after that. Plus there was a cash bonus for moving. I’ll get a deposit in my account after 90 days with them. The move was painless, only takes a few minutes of paperwork. The bummer is having your account frozen while the move takes place. Only thing I am trying to get a handle on is why I can’t have a margin account in my IRA? I did at TD. I don’t want to wait 3 days for the transaction to clear.

  4. R Byram
    R Byram says:

    I’m always watching the small cap oil etf PSCE as it really levels out the bumps – but it even got excited yesterday and was up 7.43%

  5. deshy
    deshy says:

    Alex, Just curious as to your thoughts on $WTIC finishing off a LT cycle. That would suggest that we may not make any higher high here and there will a short burst and then roll over. Or am I interpreting the cycles incorrectly? Thx

    • Bill
      Bill says:

      Unless its an ICL, in which case the previous DC would probably be LT and the ICL would go much higher and be RT

      • deshy
        deshy says:

        Thx Bill but could you pls explain. The Aug low has not been broken so not sure how anything after Aug could qualify as an ICL (i.e. these are all higher lows). I guess it could be RT if the first DC was extremely short and ended beginning of Sept and we are now into the 2nd DC. Seems far fetched but I guess in these markets anything is possible.

        • ray
          ray says:

          hi Deshy
          we had the same discussion yesterday – so check what Alex answered in yesterday’s blog
          indeed icl in August, not a great first DCL since it’s left transl. however the rules changes if we’re in a triangle formation so read that again – Hope that helps

          • chartfreak1
            chartfreak1 says:

            Thanks Ray, I missed Deshys question

            Deshy, I may be the only one that thinks this way, but in my personal experiences, when I’ve seen GOLD cycles for a triangle, the translation is always L.T. because of the peak of the triangle, and then a break out has occurred above that peak on the next daily cycle….so…
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            My personal opinion is that I use cycle counts and L.T. & R.T. expectations, unless I see a triangle consolidation. I see one in Oil. I DO NOT like to make exceptions or bend & ignore rules, but past experience does allow me to think this way

            Hope that helps

    • Cason
      Cason says:

      If we have this correct, this would be Wave 3, btw that and the triangle I would expect a new high above the Aug high during this 2nd daily cycle. Expect. But we won’t be for sure until it happens so need to stay tuned to the fact that this could change.

  8. Erik Sven
    Erik Sven says:

    Still in cash. Didn’t trust the move in oil yesterday. Locked out until back test (if there is one). Is there consensus now that this is a new oil DC?

    • Cason
      Cason says:

      Happened to me with miners last winter, by the time I believed I was locked out until May when they finally pulled back just a bit.

  10. Thomas Yarbrough
    Thomas Yarbrough says:

    What do you all think of xra? its a gold stock with significant insider buying. The insiders buys for egi were just token buys

  13. Carlnetscouts
    Carlnetscouts says:

    Don’t know if anyone has noticed but GSS and CALVF two of my favorite gold stocks have been doing very well lately within this correction.

      • Tammie
        Tammie says:

        Well, don’t think gold has really been up….I have to stop looking at marketwatch…they’ve had gold up $3+ all day…and it hasn’t been…their price is always wrong it seems but I still look at it…old habits die hard…..geez….here I was thinking that all day….

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