from ChartWorks:: published by Institutional Advisors
The relationship between commodity prices and related stocks has been a valuable tool in the analysis process. The current bullish divergence of the XOI versus and Crude Oil is one that has shown up seventeen times in the past three decades. The results have been consistent. . . rising stock prices in the ensuing weeks. A daily RSI(14) reading in the mid 70s to 80s should coincide with the next high in the index.
In addition to individual stocks, there are exchange traded funds that offer investors an opportunity to participate in the sector. In the US, the XLE Energy Select SPRD and OIH Oil Service Holders have a good correlation with the XOI index. In Canada, the XEG is an iShare of the TSX Capped Energy Index. All trade with good liquidity and have options available.
Bullish divergences over the past three decades
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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December 7th, 2023
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