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Will the Oils-Energy Sector Catch QE Fatigue?

Exxon Mobil (XOM) ($91.80 vs. $86.85 on Aug. 1) continues to have a buy rating according to ValuEngine with a reasonable P/E ratio and is above its 200-day SMA at $85.52.

XOM traded to a new multiyear high at $92.57 on Sept. 25 and has a positive but overbought weekly chart with the 200-week SMA at $74.77. Investors and traders should employ a "buy and trade" strategy between the value level and risky level.



The table of Oils-Energy stocks shows that all 11 stocks have Buy ratings. The most undervalued stock is HAL by 17.7%. WMB is the most overvalued by 50.8%. The worst performer over the past 12 months is APA up 8.5%. WMB was the best performer up 86.3%. All 11 stocks are expected to rally over the next 12 months by 6.1% for WMB to 10.4% for CVX.



Ten of the 11 stocks are higher since Aug. 1. The only stock slightly lower is OXY. Stocks that set their 2012 highs in the first hale of 2012 are APA, APC and OXY. The stocks setting 2012 highs recently are CVX, NOV, WMB and XOM. The others, COP, EOG, HAL and SLB came close to matching first half 2012 highs recently.

This mix of performances could be a symptom of QE Fatigue so reduce positions by booking profits, but maintain core holdings in the oils-energy sector.

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.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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