PUBLISHED BY INSTITUTIONAL ADVISORS
FRIDAY, NOVEMBER 30TH, 2008
Technical observations of RossClark@shaw.ca
Crude oil generated daily capitulation readings in October. The analysis at the time concluded that the most consistent action following the signal would be an upside bias in the XOI and TSX Energy indices over two to three months. Covered writing strategies were recommended to take advantage of the historically high premiums available in options.
Weekly capitulation alerts are now evident in the oil market for the first time since March 1986 so it puts it in a position to see a reversal to the upside. This signal comes as crude oil enters one of its seasonally favourable periods – early December through March. In a normal year prices will stair step their way higher. In bear market years December-January can provide a relief rally. Traders should look for a daily RSI(14) reading around 60 in that time frame as a selling opportunity in both oil and the related stocks.
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.
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BOB HOYE, INSTITUTIONAL ADVISORS
November 30th, 2008
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