Squeezy
Oil
took out the short term negative trend early this year. Since then it
has squeezed, and is pushing above the longer term negative trend line
as of writing. Note we are well above the 200 day, but approaching the
first bigger resistance area that comes in $1.5 higher.
Source: Refinitiv
Overbought
Oil at the most overbought levels since September 2023.
Source: Refinitiv
Oil & XLE
Oil is not energy, but there is obviously a huge read across. XLE continues to lag...
Source: Refinitiv
XLE as a hedge
The
following chart of 1-year trailing returns for XLE from 2000 to the
present shows when this group truly generates outsized annual returns.
Data Trek: "we
reiterate our longstanding view that Energy stocks are always a
sensible equal weight (3-4 percent of US/global stocks) in a diversified
equity portfolio. If there is a geopolitical event that causes much
higher oil prices, history shows that no other sector will hedge a
portfolio better than this group. "
Source: Data Trek
Buyback king
The energy sector is the buyback king (European data).
Source: Barclays
Cheap
Energy sector remains very cheap vs. the market.
Source: Barclays
Under-owned
Energy is not well owned.
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