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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.

5-day US S&P500 sector heatmap captured from Sectorspdr.com

5-day US S&P500 sector heatmap captured from Sectorspdr.com

 

WTI technical picture

  1. This is a weekly line+bar chart of WTI from June 2015 – 09 Feb 2018.
  2. For short term traders such as scalpers, day traders, the momentum trade is down.
  3. 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.
  4. 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.
  5. However these potential support levels are also quite far away so until price action reveals support, follow the momentum trade.
WTI weekly line+bar chart from June 2015 - present

WTI weekly line+bar chart from June 2015 – present | MT4

 

As for SGX-listed oil and gas stocks (rig builders) Sembcorp (U96.si) and Keppel (BN4.si), they are doing the usual correlation play.

2018 year to date WTI, Sembcorp, Keppel Corp overlay on 4-hour time frame

2018 year to date WTI, Sembcorp, Keppel Corp overlay on 4-hour time frame | Source: Tradingview.com

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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