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Chris Vermeulen
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Chris Vermeulen the founder of AlgoTrades.net Algorithmic Trading Systems. This automated investing system is designed for individual investors and traders. He is also the editor of the TheGoldAndOilGuy newsletter which is designed for gold market traders providing quality ETF Trade Alerts,... More
My company:
AlgoTrades Algorithmic Trading Systems
My blog:
TheGoldAndOilGuy - Gold Market Traders
My book:
Technical Trading Mastery - 7 Steps To Win With Logic
  • Energy Stocks & Oil Special Trend Analysis Report 0 comments
    Jan 28, 2013 9:23 AM | about stocks: USO, XLE, XLU, SCO

    Crude oil has been trading ways for the past year between the 2011 high and low. The trading range through 2012 has been contracting with a series of lower highs and higher lows. This pennant formation because it is taking place after an uptrend is a bullish pattern with $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 area 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 form 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

    (click to enlarge)

    Crude Oil Price Chart - Daily short term Analysis & Target

    If 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… But keep in mind whole numbers (decade & 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. Can be followed with USO, UCO, SCO

    (click to enlarge)

    Utility Stocks - XLU - Weekly Investing Chart

    The 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 its self… Keep in mind you can view my actual watchlist of stock and ETFs I trade in real-time with my analysis free: https://stockcharts.com/public/1992897

    (click to enlarge)

    Energy Sector Weekly Investing Chart

    Energy stocks which can be followed using the XLE exchange traded fund (NYSEMKT:ETF) typically leads 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.

    (click to enlarge)

    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: http://www.thegoldandoilguy.com/articles/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

    Chris Vermeulen

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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