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     Kubang Celebrity Bewarse Username: Kubang Post Number: 38090 Registered: 09-2011 Posted From: 161.141.1.1 Rating: N/A |
Snippet from the subscription: ////////////////// And looking at the performance of stock markets from the top 15 global economies, I’m seeing a clear trend of outperformance from leading energy producers, with the top three rankings being Russia (RSX), Brazil (EWZ), and Canada (EWC). Bottom line: the global energy sector is heating up! There’s just one problem – for us, for the time being – and that is the trend is still “down” for most energy sector securities. The energy sector has historically produced its strongest returns during the sixth-month period from October to March. Take a look at this chart, which shows the six-month average returns when a new position is established at the beginning of each calendar month… Clearly, buying energy stocks in October, or even November or December, has typically been a great idea. While these stocks may have gotten an early boost this year, due to supply concerns related to Hurricanes Harvey and Irma, the sector should have a tailwind at its back for the next six months, due to seasonality alone. This could end up being – pardon the pun – a perfect storm for energy sector stocks, whereby the timing of market-beating relative strength and favorable seasonality align, giving the sector a strong burst of energy for months ahead. We’re still waiting for the trend to turn positive, but if these forces continue to align, there are two additional factors that could make the energy sector’s “pop” especially lucrative – particularly if investors continue to be concerned with other “toppier” parts of the market. For one, the energy sector is so down-and-out that it now has massive upside potential, if it were to mount a catch-up rally. Specifically, shares of XLE are currently trading 34% below its July 2014 peak. All other sectors are trading within 0% to 4% of their highs. That’s not to say energy stocks can’t fall further from here. They could. But it’s more likely investors will rotate out of high-flying sectors during the next scare. Most of the so-called weak hands have already sold out of the energy sector. And if the broad market makes another move higher, and investors are enticed by the bargain-basement prices in energy stocks, the sector could mount a pretty impressive rally, bringing it closer in line with its peers. Secondly, commodities and energy sector stocks are typically the last assets to peak, during a major market top. Ignorance is bliss |