Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Energy Stocks Sector and XLE ETF Watch

Companies / Oil Companies Apr 19, 2010 - 12:05 PM GMT

By: Mike_Paulenoff


Best Financial Markets Analysis ArticleToday we're going to discuss the energy sector. It has lagged the overall market, but it's poised to move higher based on recent technical action and Friday's close as well as geopolitics that could impact the oil industry.

After signing the new Nuclear START Treaty with Russia last week, in which Iran was the central topic of discussion, President Obama in the early part of next week is expected to urge the allies to continue pressing Iran and North Korea to abandon their nuclear programs and to seek tougher sanctions on Tehran. The tension surrounding potential Iran sanctions can, and most probably will, impact the price of oil.

Looking at the technicals, crude oil prices have gone up about 80-85% since the low in Feb 2009. A series of higher lows and higher highs took it into Oct 2009, going from under $50 to $85 a barrel, nearly doubling in price, before going sideways. In this sideways consolidation period after October (remaining between $70 and $85), crude oil was able to digest the prior gains, before turning up again in Feb in what appears to be a new upleg after the digestion period.

As long as crude oil consolidates between $87 and $82, the next likely move in crude oil will be up towards the $90 area, then possibly $100 if there’s some kind of geopolitical event.


The Energy Select Sector SPDR (XLE) also has a series of higher-lows and higher-highs in an uptrend, then a sideways channel from Oct to now that looks like it's about break out at around 60.50-.80. If that happens, we can expect the XLE to take off. If it goes to the top of the channel, which has been very well defined, it's conceivable that it's headed as high as the 68-69 level up from its current position of 59, or 15%, which is a good reason to keep the XLE on the radar screen.

Comparing the XLE to the S&P 500, the XLE is still attempting to break above its prior high, while the S&P 500 has already broken above its prior high of 1148. It’s now at 1194, which is almost 4% above it prior high.

Now we’ll look at the components of the XLE, starting with integrated components.

Energy Stocks to Watch

Exxon Mobil Corp (XOM), which is the biggest component of the XLE, is in a minor up-trend off the Feb low. However, it is lagging the overall index and could be called a relatively weak component of the XLE. It’s now approaching its 200-day exponential moving average, while the XLE and crude oil are well above their 200-day. Exxon’s 20-day moving average just crossed above the 50-day, a very important near-term technical sign because it indicates that it's in a turn, but first it will have to get above the top of its channel at 69-69 1/4, then it should be off to the races.

Where can it go? Exxon should be able to go considerably higher into the gap area left behind on its way down in Dec anywhere between 71 1/2 and 72.80.

Chevron Corp. (CVX) is a completely different picture than Exxon, much more bullish, much more constructive, a much more powerful chart. It is now climbing towards its prior rally peak after a pullback. It doesn't look like either crude oil or Exxon, but has its own particular profile. The 20 EMA is above the 50, which is above the 200. The 20 and 50 have turned up and now the 200 is turning up as well. From looking at the channel it appears it will test the 80-81 1/2 very soon and if it breaks out of that it will go to 85-86, possibly higher. This is a very constructive chart especially in comparison to Exxon Mobil. We would probably want to be more involved in CVX, although both are headed higher.

ConocoPhillips (COP) is much more bullish than either of the previous two charts. It’s in an uptrend, it went sideways between Oct and last week, but late last week it broke out and looks like it has considerably higher to move as well. The top of the channel for COP is at 60 and it’s currently at 55.30, which is a 20% upmove.

So, in terms of the integrated oil companies in order of bullishness or attractiveness, there’s COP, CVX, and XOM.

Now let's look at some non-integrated components, the oil and gas producers.

Devon Energy Corp (DVN) doesn't look like any of the components discussed so far. It is a badly lagging chart compared to the overall index. However, it does have a very impressive overall pattern of higher-lows and higher-highs since the Feb-Mar 2009 low. The chart shows an uptrend followed by a correction followed by what? Right now it's battling its averages, the convergence of its 20-, 50- and even its 200-day moving averages. The next potential up-move is at around 72 from Friday’s closing at 66-67. If it does move to 72 then there is a real potential for it to move even higher.

XTO Energy Inc. (XTO) is much better than DVN with higher-lows and higher-highs going back to 2009. If it runs to the top of the channel it has a whole lot higher to go. It's about to challenge its prior high at 49.10 from Dec 14. Should it take that out, it will be header up towards a higher target. The moving averages are pointed higher, and the consolidation of last week and pop off its 20- 50-day combination is very powerful. It looks like XTO has considerably higher to go.

Apache Corp. (APA) is natural gas and oil, and exhibits a much more powerful chart than a few of the others. It looks very much like the XLE, and is about to challenge and more than likely break out above key resistance between 107.50 and 109. Should that happen APA is going a lot higher and could accelerate towards the 120-22 level, or 10-11%. It also looks like a powerful chart and one we need to keep on our radar screen for next week.

This energy sector seemed poised to move higher. It has lagged behind the S&P 500, but there is usually a rotation going on and the Street is looking for the next candidate to go higher in that rotation and energy could be it.

Keep these charts on your radar screen this week as we will be discussing them during the week.

Sign up for a free 15-day trial to Mike's ETF & Stock Trading Diary today.

By Mike Paulenoff

Mike Paulenoff is author of (, a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

© 2002-2010, an AdviceTrade publication.  All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

Mike Paulenoff Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules