Friday Sept 30, 2017
Here is a quick run down on a great recovery week for energy
The percent of major energy shares in bullish (up) formation is now 75%. That is double where this indicator stood just two weeks ago. Never mind all the news about the over-supply of oil. Social mood has turned positive on energy and prices have reversed for the first time this year. This confirms our optimism expressed in this space the last two weeks.
Many issues however still offer good value. Our bell weather Apache APA ahs risen from $38 to $45.80. Anadarko APC jumped from $40 to $50 and is now pulling back a bit.
Patterson Energy PTEN had a huge move from $15 to $21 where it now consolidates are previous resistance. Transocean RIG is still trading for a fraction of book value having moved from $7.50 ot $10.50. The Energy Service ETF XES is just getting underway jumping from $13 to $16.58.
Crude oil is closing this Friday at $51.57, well above the recent low of $44.
Natural gas actually declined this week falling from $3.20 to $3.017. We expect another buy signal however.
Energy has underperformed the rest of the market all year. Now the situation is reversed with energy in a bullish position. I expect this to easily last into December.
Elsewhere interest rates continue to climb. That whiff of early inflationary winds will also help the energy sector.
Comments