Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
SPX/Gold, 30yr Yields & Yield Curve – Amigos 1, 2 & 3 Updated - 21st Oct 18
Gold Stocks Sentiment Shifting - 21st Oct 18
Why Is the Weakness In GBP/USD Likely? - 21st Oct 18
Stock Market Bubbles, Balloons, Needles and Pins - 21st Oct 18
The Incredibly Bullish Set-Up for Gold - 20th Oct 18
Here Comes the Stock Market Retest - 20th Oct 18
Waterproof Camera - Olympus Tough TG-5 Setup and First Use - 20th Oct 18
Israel’s 50-Year Time Bomb, Pushing Palestinians to the Edge - 19th Oct 18
Bitcoin Trend Analysis 2018 - 19th Oct 18
History's Worst Stock Market Crash and the Greatest Investing Lesson! - 19th Oct 18
More Signs of a Stocks Bull Market Top and Start of a Bear Market in 2019 - 19th Oct 18
Stock Market Detailed Map Of Expected Price Movement Before The Breakout - 18th Oct 18
Determining the Outlook for Gold Mining Stock - 18th Oct 18
Investor Alert: Is the Trump Agenda in Peril? - 18th Oct 18
Stock Market is Making a Sharp Rally After a Sharp Drop. What’s Next? - 18th Oct 18
Global Warming (Assuming You Believe In It) Does Not Affect Gold - 18th Oct 18
Best Waterproof Compact Camera Olympus Tough TG-5 Review - Unboxing - 18th Oct 18
Silver's Time Is Coming - 17th Oct 18
Stock Market Volatility Breeds Contempt - 17th Oct 18
Gold 7-Year Bear Market Phase Is Over - 17th Oct 18
Gold - A Golden Escape - 17th Oct 18
Tec Stocks Sector Set For A Rebound? - 16th Oct 18
Real Estate Transactions are Becoming Seamless with Blockchain-Powered Data Sets - 16th Oct 18
Important Elements of a Viral Landing Page - 16th Oct 18
Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?! - 16th Oct 18
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

The Most Powerful Indicator for Trading the Energy Sector

Commodities / Energy Resources Apr 06, 2009 - 05:40 AM GMT

By: Chris_Vermeulen

Commodities Best Financial Markets Analysis ArticleThe energy sector has been moving sideways since October if, you look at the XLE energy ETF below. Although the energy sector dipped lower in March the bullish percent index is showing some signs of strength. A lot of stocks continued to drift lower in March due to the lack of buyers and not because of heavy selling. This pulled the sector lower until buyers stepped in and pushed things higher again.


Energy Stocks ETF – Daily Chart
Sideways price action since October with momentum pushing higher.
Energy Trading

Energy Bullish Percent Index – Daily Chart
The bullish percent index is starting to show signs of a reversal with some follow through. This index made a new multi month high and has started to move north again. This week will be interesting to watch. Hopefully we start to see more stocks have point and figure buy signals, which is what this chart is based on.

The bullish percent index calculates the percentages of stocks in a sector, which are on a Point & Figure Chart buy signal. It is used to determine overbought/oversold conditions. The index/sector fund cannot be applied directly to individual stocks but rather to the entire sector.

The bullish percent indicator is one very powerful tool for swing trading intermediate trends. It works well with every sector, especially the energy and gold sector. The key here is to trade with the trend and enter on pullbacks with low risk buy signals. Trade the opposite in bear markets. I used this for a gold buy signal in December and prices had a 16% rally. These are the exact types of trades I wait for in energy and gold. I like to catch a few of these each year, which makes up the majority of my gains. I use several other charts to confirm buy and sell signals along with my strict money management rules for not making trades if risk is over 3% and never riding a losing trade down.

Sometimes, depending on the market condition, I will scale in and out of positions using this chart. Accumulate on Wave Bottom Zone and scale out, when the sectors is at the Wave Top Zone. This strategy can carry a big draw down, so using other charts as well can minimize risk.

How To Trade Energy

Crude Oil Breakout – Daily Chart
Crude oil has been holding strong since is breakout at the beginning of March. Last week we had a pull back, which was expected at that level. A cup & handle patter looks to have formed with the current price forming the handle. This is a bullish pattern and a breakout to the upside should send breakout traders buying oil.
How To Trade Oil

Current USO Trade – Daily Chart
Currently we are long USO from the beginning of March and some profits locked in and the balance of our position set with a stop at break even. This fund had a breakout with MACD confirming along with physical crude oil prices. The bullish percent chart also was deep in the Wave Bottom Zone, which indicated a short-term oversold level.


© 2005-2018 http://www.MarketOracle.co.uk - 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