How’s Energy (WTI, U96, BN4) doing in this ‘correction’?
I thought crude oil, oil and gas stocks will be the stars for 2018. After all WTI did overcome a 3-year high of 62.60 set in May 2015. In addition, some oil and gas stocks printed very beautiful reversal patterns and were rallying in January accompanied by high volume.
Unfortunately, a 5-day heatmap indicates that the Energy sector (XLE) in the US was the worst performer.
WTI technical picture
- This is a weekly line+bar chart of WTI from June 2015 – 09 Feb 2018.
- For short term traders such as scalpers, day traders, the momentum trade is down.
- For long term investors however, a new 52-week high beating 3-year level at 62.60 is a bullish indication. I would not be surprised to see higher by end of 2018.
- Based on turning points, channels in this chart, WTI appears to be going through a retracement in an uptrend. I would view this positively as a chance for WTI to find support, for patient bulls to find a discount.
- However these potential support levels are also quite far away so until price action reveals support, follow the momentum trade.
As for SGX-listed oil and gas stocks (rig builders) Sembcorp (U96.si) and Keppel (BN4.si), they are doing the usual correlation play.