Energy Sector Shows Improved Technicals

Here is a chart of the oil ETF that did not make it into my column yesterday on Barron's (Energy Stocks to Fuel Gains).

As you can see, it has a tentative upside breakout. Considering what has been going on in the world, this is not too shabby.

Anyway, the point was that oil is firmer and big integrated oil stocks have some interesting fundamentals. I profess no expertise in fundamentals but single digit P/E ratios with dividend yields that are double the 10-year Treasury got my interest. I cannot tell you if the P/E for energy stocks should be that low. I cannot tell you if they are paying out a lot of earnings to assuage Occupy Wall Street protestors.  But to me, these two seem worthy of further investigation, not for the fundamentals but to see if the technicals tell a good story, too.

They do. Or at least it is a better story than most of the rest of the stock market. Apple does not count.

The bottom line is that big energy stocks have a lot going for them, even if the market goes down as I think it will. They may lose some value but with dividends, relative performance, on-balance volume, underlying commodity strength and few other things they should reduce the pain for those who simply must be in stocks.