Time To Start Buying Energy Stocks? [ConocoPhillips, Chevron Corporation, Halliburton Company, Schlumberger Limited.]

energy independenceDan Hassey: WTI crude oil prices have dropped about 14% since their June peak, and natural gas is lower by about 40% since its February peak.

Energy stocks have mostly followed suit, and it’s clear some are in correction mode while others are in outright bear-market territory.

While many traders have been trying (and failing) to catch the bottom, if you read my short-term outlook for oil and natural gas, you knew oil was bearish and had not found a bottom. You also knew natural gas looked like it had found a bottom and that it’s been basing since July — a bullish view.

Although I wrote that I preferred natural gas to oil at this time, which remains true, that bet needs some more time to pay off. Most energy stocks are down, but not as much as natural gas.

And for energy investors, there’s beauty to be found in what some others may think is some ugly trading action.

As winter approaches and the end of the inventory build season approaches, let’s revisit the “commodities of winter” and with this comparative chart of a few of the ETFs that represent the energy sector …


The chart shows us that the SIG Oil Exploration & Production ETF (EPX), Market Vectors Oil Services ETF (OIH), SPDR S&P Oil & Gas Exploration & Production ETF (XOP), First Trust ISE-Revere Natural Gas ETF (FCG), iShares U.S. Energy ETF (IYE) and the Energy Select Sector SPDR (XLE) have trended downward in tandem for the past several months.

Half the ETFs are in technically in bear-market territory, down more than 20% each. The rest are in a correction phase, down more than 10%.

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