Daily Market News - 8th June 2022
Time For A Pause In Energy?
It’s been a few weeks since my last letter, if you haven’t taken a vacation (like me) for a couple of years, I can highly recommend it.
Anyway, that’s enough about me. We’re here for charts.
Unless you’ve been stuck on the moon, you’ll know by now energy prices have gone through the roof, and while I’m sure we all notice the rising costs of filling up the car or heating the house, the question I’m asking today is something along the lines of, is it time for Energy stocks to stop going up?
As always, I have a few charts I’d like to share and I think they make sense.
So lets start with Captain Obvious when we’re talking about the Energy Sector.
SPDR Energy (XLE)
This is a chart I’ve shared with our clients and members weeks ago. The chart is essentially saying that Energy is fast approaching a key $100 level where I think we can all expect anticipate a little digestion of gains.
Could XLE blast off and break out to new all time highs?
Sure, I’m not against the idea.
But what I know about key historical levels, oftentimes it can take weeks/months to eventually resolve higher. And I think this is information I’d want to pay attention to.
Lets take a look at Oil and Gas Production.
SPDR Oil & Gas (XOP)
Again, there’s nothing fancy about the chart, it’s Technical Analysis kindergarten, basic support and resistance levels.
Volume is drying up and we’re fast approaching another key level. Starting to make sense?
Lets take a look at 1 of the biggest components of Energy
Exxon Mobil Corp (XOM)
Notice something?
Again, we’re pushing up against key levels,
In short, the charts are basically saying targets are being met and I know I certainly won’t be the only 1 noticing it.
If we break out to new ATH’s and carry on ripping higher, no problem, I have decent energy exposure, so nothing would make me happier, but I think it would be foolish not to pay attention to the information historic price is telling us.
In the meantime, there are plenty of alternative charts to choose from.
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