RSSDrilling Into Energy
By Jim Farrish | November 25, 2008 | 10:12 AM | 0 Comments
To go with the thoughts of the Obtaining Energy Sector Exposure piece, there are two charts worth watching relative to the Energy Sector. The first is ExxonMobil (NYSE: XOM). As we discussed in the spotlight the short term downtrend line on the energy index could be broken with a continue push to the upside. Drilling into the sector to find what is driving the index higher, turned up ExxonMobil as one of the leaders. As you can see on the chart the downtrend line was broken to the upside yesterday. This is a potential opportunity to the upside with a target of $90. The 200 day moving average at $82.66 would pose the first point of resistance on the move. This is on my watch list to confirm the upside momentum.
The other chart of interest is Sunoco (NYSE: SUN). This refiner has tried to complete a double bottom and accelerate through the downtrend line over the last couple of weeks. This is a stock that has been on my watch list for awhile and has give several short term plays, but I am looking for a move near the $45 mark short term. The volatility has picked up in the stock along with the news surrounding other refiners and their inability to execute short term on the decline in oil prices. Sunoco has been guilty by association and not execution. I look for the stock to move higher through this volatility. Any plays here would need to give room for the volatility to play out and that increases your risk to the position. Be cautious and disciplined in how you approach this stock.
Both of these charts are looking at the technical view of the opportunities. Fundamentally both are doing well relative to the sector overall. If you don't follow technical analysis I would suggest to use this as a learning opportunity and follow how these play out. Don't risk money on something you are not familiar with. Educate yourself first before you put money at risk. If you are familiar with technical analysis these will be updated if they work out and the breakouts continue. If not I will update them based on what happened. Either way develop a strategy before you put money to work in the markets. This is an extremely volatile market cycle and you should play accordingly.
| 
|
