| Technical Analysis $EPX $OOG OIH $OIX XLE Oil Stocks |
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| Saturday, December 2, 2006 |
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Weekend Update - $EPX, XLE, $OIX, $OOG, OIH
SIG Oil Exploration & Production Index (EPX) - Weekly Chart
If you look at the weekly chart of the $EPX you can see that it is in an ascending triangle pattern. Right now the $EPX is breaking out of that out ascending triangle pattern. The $EPX is up 5.69% and now trading at 333.38, which is a new all time high. Higher prices are a bullish indicator.
Furthermore, as you can see by looking at the weekly chart, the indicators and oscillators are in bullish trend reversal. The RSI and PPO continue to make new highs along with price which is bullish. There is sector rotation into the energy sectors by money managers because the energy sectors are making new all time highs. Naturally the pros will want to pile into sectors that are making new all time highs.
XLE (Energy Select Sector SPDR) Amex- Daily Chart
The daily chart of the XLE illustrates that it has a pattern within a pattern. The primary pattern is an ascending triangle pattern (in light blue) and within that, there is the secondary diamond continuation pattern (in yellow). Like the EPX the XLE is also making new all time highs. The XLE is currently trading at a new high at $60.72. The RSI and PPO continue to make new highs along with price which is bullish. There is sector rotation into the energy sectors by money managers because the energy sectors are making new all time highs. Naturally the pros will want to pile into sectors that are making new all time highs for the month of December.
$OIX (Oil Index -CBOE) INDX- Daily Chart
I don't really follow this index that much because it is too widely followed. However, the main thing to know here, is that the $OIX is making new highs without the price of oil. The is referred to as out performance of the actual commodity which is bullish. The $OIX is outperforming the price of OIL. As you can see by looking at the chart, the $OIX is trading within the confines of its up trending channel. Today, the $OIX also made new all time highs when it hit 661.60 Intraday.
$OOG (ISE OIL & Gas Services Index) INDX - Weekly Chart
The weekly chart of the $OOG illustrates that it is has just completed a wave 3 to 4 pullback to the longer term uptrend line. The primary pattern is an ascending triangle. This week, the $OOG was very strong and broke the intermediate term down trend line by producing a gain of 4.27%, thus determining that the big boys are moving into this sector with a vengeance. Although the Aroon remains in a bearish trend reversal, the wm% and PPO are now closing in onto positive territory indicating a change in trend for the Aroon is forthcoming. The RSI and Stochastics are positive and moving up along with price.
Oil Services Holders ETF (OIH)- Weekly Chart
The weekly chart of the OIH shows that it has been in a strong bullish trend reversal for the last 2 years. As with the $OOG, the OIH has also just completed a wave 3 to 4 pullback to the long term uptrend line. The OIH broke the downtrend line in October and has been advancing steadily on heavy volume ever since then. This week alone, the OIH gained 5.27% on good volume. The OIH closed near it's weekly highs at 1467.65 and reached a high of 148.00. Although the Aroon remains in a bearish trend reversal, the wm% and PPO are now closing in onto positive territory indicating a change in trend for the Aroon is forthcoming. The RSI and Stochastics are positive and moving up along with price. The momentum into the OIH has not even started yet, and it is for this reason that I maintain a strongly bullish stance, and why our portfolio is heavily waited in the energy sectors.
Pivot Calculator
Furthermore, if you look at the pivot calculator for the OIH shows you that the risk reward for the OIH is very bullish for longs. Anything related to Oils stocks will do the trick!
Positive Divergence Chart for Crude Oil (in blue) and the OIH (in Green)
If you look at December 2005, you can see that crude oil along with the OIH shot up at the beginning of the month. They both then pull backed from the middle of the month to the end of the December '05 before they both resumed a massive parabolic uptrend through the end of January '06.
Oil and the OIH will most likely experience the same volatility this December '06 as it did last year. The OIH should be strong this week and then consolidate during the week of options expiration. It should then resume it's uptrend after a quick pullback. When January '07 begins they Oil and the OIH should resume their strong uptrends.
I want to reiterate that the energy sector is the place to be positioned, and we want to be in it before the momentum really starts to take off by the end of this month to early January.
Charts Patterns that many of our stocks are in
Ascending Continuation Triangle Chart Pattern
Bottom Triangle Chart Pattern
Continuation Diamond (Bullish) Chart Pattern
Continuation Wedge (Bullish) Chart Pattern
Cup with Handle Chart Pattern
Diamond Bottom Chart Pattern
Double Bottom Chart Pattern
Flag (Bullish) Chart Pattern
Head and Shoulders Bottom Chart Pattern
Megaphone Bottom Chart Pattern
Pennant (Bullish) Chart Pattern
Rounded Bottom
Symmetrical Continuation Triangle (Bullish) Chart Pattern
Triple Bottom Chart Pattern
Upside Breakout Chart Pattern
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