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Barron’s is suggesting to buy some oil stocks after the huge decline over the past few months. Not a thing wrong with the idea of buying low and hoping to sell higher.
The historic decline in Crude Oil since this past summer, 2nd largest one year decline in 30-years, is now facing an important support line at (1) above.
If rising support at (1) fails to hold, Crude could find itself testing its long-term sideways trading channel, which comes into play at (2), around the $40 zone.
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See more of our research…..HERE
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I am buying XLE today. Good time to accumulate.
$WTIC may well visit $70 before it visits $35, but it’s just a little too early to tell, and best to wait for confirmation off of that critical support. By all technical measures, oil is deeply oversold, but that doesn’t mean support will hold at [1]. Nothing is lost by waiting a couple of weeks – at most just a few % of what could be a fantastic trade.