December 2nd, 2023

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ChartWorks: published by Institutional Advisors
Bob Hoye
September 19, 2007
Technical observations of

Crude Oil
The crude oil market continues to move ahead in the normal seasonal manner. Strength should be anticipated to last for another two to five weeks followed by a low in December-January. During years such as this when the oil stocks (as represented by the XOI) are in an uptrend the weekly RSI(14) has topped in the 70 +/- 5 range. The XOI currently sits at 1411 with an RSI reading of 57. It will take a weekly close of 1500 to generate an RSI of 65 or 1700 to generate an RSI of 75 by the end of the month. (For future reference, flat years show RSI tops around 64, while downtrending years have recovery highs with the RSI in the 50’s).

Natural Gas
Even allowing for the upside bias of storage over the years the current natural gas inventories are at the upper end of the range (3069 Bcf) for this week of the year. In years with high inventories (1994, ’95, ’98, 99, ’02, ’04 & ’06) the seasonal rally has taken hold in the second half of September. But, unless the build-up in inventories slows significantly prices could easily top out by late in October.

The stocks have come to life recently with increasing upside volume. The chart of the XNG can be used to monitor the rally. Ideally, the daily RSI(14) will move into the 68 to 80 range and provide an optimum selling opportunity.

September 19, 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.

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