During Jim Cramer's Mad Money program Tuesday he took a technical look at the oil complex, from big-cap names to exploration to the services exchange-traded fund.
During the "Off the Charts" segment, Cramer teamed up with Real Money Pro's Robert Moreno to examine energy.
"These pictures tell you more than a million words ever could," Cramer said. "But you need to remember that this can all change in the blink of eye if the price of oil keeps going down, which could ruin everything here."
Moreno's charts paint a bullish picture overall, but Cramer said he remains a skeptic given the propensity of oil to fool the maximum number of people at every single turn.
Below are Moreno's charts and his analysis of patterns of the stock movement:
The counter-trend breakout call in Exxon Mobil (XOM) on Aug. 30 was correct, but when the stock touched its 200-day moving average I expected a period of consolidation. It broke above that channel top on fundamental news and then moderated back into the channel.
The Market Vectors Oil Services ETF (OIH) broke out of its flag pattern as expected, but quickly lost momentum and it began to move sideways. Schlumberger (SLB) met resistance as predicted at its 200-day average.
My thinking was that the flag patterns on the service sector charts would power eventual breaks above their 200-day moving averages and lead the broader energy space higher. The calls were correct in the short term, but the macro call was wrong. The 50-day moving averages failed and the entire complex continued its decline.
Exxon Mobil eventually did consolidate as expected, but instead of following that with a breakout, it broke down through the 50-day moving average. It then went through an unstructured or erratic period of price activity before rallying of its low this month, retaking the 50- and 200-day averages. Moving average convergence/divergence (MACD) is tracking higher, reflecting the recent positive price momentum and the accumulation/distribution line a measure of money flow is well above its 21-day signal average.