Energy Stocks Can't Ignore Falling Oil Prices
Last Friday, crude oil fell 38% from its 252-day high to a new 63-day low. At the same time, the S&P 500 energy sector closed less than 3% below its respective 252-day high.
Dean Christians, Senior Research Analyst of SentimenTrader, ranks the current close relative to all other closing price for the S&P 500 energy sector and crude oil over the last 63 days. The energy sector closed in the 90th percentile, while crude oil fell to the lowest level of 0%.
This level of divergence between the energy sector and crude oil is unusual.
When these divergences occurred, at least in the short term, weakness might lead oil stocks to an average fall of 2.2% over the next week and 2.3% over the following two weeks, according to Sundial Capital Research data.
The good news is that the drop tended to be a buying opportunity as energy stocks gained 12.1% on average over the next year.
Source: SentimeTrader, MarketWatch
Disclaimer: Investing involves risk and the potential to lose principal. Past performance does not guarantee future results. This is for information and illustrative purposes only. It should not be relied on as advice or recommendation.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Sam2101 : inconclusive write-up. no mention of any notable energy or oil stocks for beginner investors