Energy Stocks, Crude Oil: Trend Analysis, Special Report
NEW YORK (www.TheGoldAndOilGuy.com) -- Crude oil has been trading the past year between the 2011 high and low. That trading range has been contracting, with a series of lower highs and higher lows in 2012. Because it is taking place after an uptrend, this pennant formation is a bullish pattern, with a chance of seeing $110 and possibly even $140+ per barrel in the next 6-18 months.
If you look at the weekly investing chart of crude oil, the key support and resistance levels are clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers, not only from the USA but globally, the odds are increased for the $110+ price target to be reached sooner than later.
Crude Oil Price Chart: Weekly Investing
Crude Oil Price Chart: Daily Short-Term Analysis & TargetIf we zoom into the daily chart and analyze price and volume, you will notice the $100 per barrel level is potentially only 2-3 days way. Keep in mind that whole numbers (decade and century numbers) naturally act as support and resistance levels. So when the $100 century price is reached, there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher.
Utility Stocks, XLU: Weekly Investing ChartThe utility sector has done well and continues to look very bullish for 2013. This high-dividend paying sector is liked by many and the price action speaks for itself. Keep in mind you can view my actual watchlist of the stock and ETFs I trade in real-time with my analysis, for free:
Energy Sector: Weekly Investing ChartEnergy stocks, which can be followed using the XLE exchange-traded fund, typically lead the price of oil. Looking at energy stocks, we can see that they are outperforming the price of crude oil and on the verge of breaking out of a large cup & handle pattern. If so, then $90 is the next stop, but prices may go much higher in the long run.
Energy Stocks and Crude Oil Conclusion: In short, crude oil is stuck in a large trading range much like gold and silver, which I just wrote about here: Precious Metals & Miners Making Waves and New Trends Once a breakout takes place on either the white or yellow lines on the first crude oil weekly chart, we should see oil, energy and utility stocks start making some big moves. Depending on the direction of the breakout (up or down), it must be played in that direction to generate substantial profits, obviously. Get my daily analysis, updates and trade alerts here: www.TheGoldAndOilGuy.com At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV