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Is it time for some energy-driven inflation? 3 charts of WTI, XLE

Is it time for some energy-driven inflation? Will an energy sector recovery become new driver of bull market to relieve FANG stocks?

Chart #1 – WTI monthly chart 2011 – present

Key features:

  1. WTI now at new 52-week high.
  2. Above previous 3-year resistance set in 2015.
  3. Since we have run out of potential resistance, target levels from 2015 – 2017, next major top going back 1 year earlier to 2014 is 107.65. 
  4. Sure or not? Some will ask. That much? Few believed WTI will hit sub-30 back in 2014 either.
WTI monthly chart 2011 - present

WTI monthly chart 2011 – present | Source: Tradingview.com

 

Chart #2 – XLE decade-long trend line going back to 2002

This I pin here for reference.

3M chart of XLE from 1999

3M chart of XLE from 1999

 

Chart #3 – XLE weekly chart from mid-2015

Even without the decade-long trend line from the chart above, this 3-year chart of XLE shows equal merit. Price is now at 9-week high with a bullish expansion above March. February drop terminated and reversed?

XLE weekly chart from mid-2015

XLE weekly chart from mid-2015

 

Will an energy sector recovery become new driver of bull market to relieve FANG stocks?

In this S&P500 sector heatmap by SectorSPDR, XLE is the best 5-day performer.

5-day heatmap of S&P500 sectors

5-day heatmap of S&P500 sectors | Source: SectorSPDR

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

“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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