Tag Archives: XOP

A Slippery Inflection Point

On the back of falling rig counts and a technical oversold bounce oil has staged a vigorous two-week rally, climbing 22% off its 5 year lows of $43.58 on January 28. Bears are calling for a continued downtrend with this recent move being only a dead-cat bounce, whereas bulls find encouragement in the price holding above $50 for the first time in weeks. Personally I would enjoy an extended period of cheaper gas as prices at the pump have jumped correspondingly in the last couple of weeks, and it would also give me the opportunity to pick up some beaten down oil majors paying fat dividends, like CVX, TOT, or the XLE ETF. Junior oils have also staged a breathtaking surge in plays like OAS and GDP, as well the XOP ETF. Another interesting ticker to watch is FCG , tracking oil & gas producers and explorers (holdings here) and its 3x leveraged cousin GASL, which have bounced sharply after hitting all-time lows recently. The energy sector has lifted broader indices in US markets, and has also thrown a lifeline to the ailing Russian market as shown by the strength in RSX, RUSL. A strengthening ruble has also helped. DWTI and UWTI are still trending and in play with this oil volatility still at the forefront.

As always, trade well and stay disciplined!