December 6th, 2023

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Natural Gas & Crude Oil

ChartWorks: published by Institutional Advisors
Bob Hoye
July 8, 2007
Technical observations of

Oil stocks are entering a sweet spot in their seasonal pattern. In years such as this when the crude oil price maintained a flat to rising trend through the seasonally weak period of late May-late June the related stocks (XOI index) exhibited short-term pullbacks that were concluded by the end of June. (In years with weak crude prices the XOI lows were seen three to six weeks later).

Most stocks in the sector went through minor corrections in June and reversed higher at the end of the month. Now that we have the first week with a higher close traders can be long and control risk with a stop below the June lows.

In 18 of the past 23 years the XOI exhibited strength into September-October. In the ten years where lows were in place by the end of June the average rally was 12% (in a range of 5% to 23%).

Natural Gas

Inventories of natural gas rose at an above average rate in the second quarter and the price is going through its appropriate seasonal decline. Barring any hurricane related activity in the gulf, the commodity price and the gassier stocks will likely remain capped until late in July. Our price target for the fourth quarter is $12.25+.

July 8, 2007

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications

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