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Crude Oil


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#1 Tal

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Posted 26 January 2007 - 01:03 PM

Crude oil is again diverging from oil stocks, ETFs today. Crude up $1 and yet XLE, OIH unchanged to slightly down.

#2 Shazzam

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Posted 26 January 2007 - 02:51 PM

the stocks never sold off like oik and are short term overbought, i would look at the recent commodity lows as a positive divergence since none of the energy indices made new lows. another point to make is that a majority of revenues for service stocks and e&p's come from nat gas not oil. even the integrateds and oil sands stocks that should have gone down with crude didn't. I am not interested in shorting these stocks but rather buying on dips.

#3 PorkLoin

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Posted 26 January 2007 - 04:48 PM

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For the stocks to take a breather would be no surprise -- it's been some serious relative strength since oil topped last July.

Shazzam -- good point about Natural Gas. It's been holding up quite well all in all, given the decline in oil.

Whether or we've seen the low in oil for this winter, I think the long term picture for both oil and NG is still bullish as heck. Seems to me the energy stocks are signalling this too.


Best,

Doug

#4 Tal

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Posted 27 January 2007 - 01:59 PM

Good points. As always, your outlook depends on your time frame. My time frame for all my trades are very short term ranging from 1 day to a week or two at max. The relative strength / weakness that I've observed specifically between Crude Oil and XLE / OIH has been extremely profitable for my VST time frame.