It’s a Little Too Early to Buy Into the Energy Sector

Bargain hunters are looking to buy into the energy sector, but a better opportunity may be approaching… [Jeff Clark's Market Minute]( It’s a Little Too Early to Buy Into the Energy Sector By Jeff Clark, editor, Market Minute Don’t rush to buy into the energy sector just yet. Oil stocks have farther to fall. The Energy Select Sector Fund (XLE) is down nearly 6% over the past month. It is one of the worst-performing sectors for May. As a result, bargain hunters are looking to buy. But it’s too soon. Recommended Link [Legends Who Predicted NVIDIA Spike Make New Prediction]( [image]( Andy and Landon Swan have developed a secret online signal that predicts big stock moves – BEFORE they happen. They used it to lock in a 669% gain on NVIDIA. Now they have a potentially BIGGER opportunity. [Go HERE for details]( -- Still on a Sell Signal The Bullish Percent Index for the Energy Sector generated a sell signal in late-April when it turned lower from overbought conditions. At the time, the financial media talking heads were universally bullish on the energy sector. Oil was trading for more than $80 per barrel. And the talking heads argued that oil companies were “printing money.” They recommended buying the oil stocks. We argued [the other side](. BPENER buy and sell signals have an excellent track record. So, we suggested patient investors would get a better buying opportunity a few months down the road. It has only been one month. The XLE is 6% lower. That already qualifies as a better buying opportunity. But, let’s stay patient… the opportunity is likely to get even better. Here’s an updated look at the BPENER… [(Click here to expand image)]( A bullish percent index (BPI) measures the percentage of stocks in a sector that are trading with bullish technical patterns. It’s designed to measure overbought and oversold conditions. An index is overbought when it registers above 80 – meaning 80% of the stocks in the sector are trading with bullish patterns. An index is oversold when it drops below 30. The blue arrows on the chart point to when the BPENER rallied above 80 and then turned lower from overbought conditions. That action generates a BPENER sell signal. Usually, it’s a good idea to avoid owning energy stocks in this situation. We’ve had three previous BPENER sell signals over the past two years. Energy stocks sold off hard following all three of those signals. The 6% decline we’ve seen in the energy sector over the past month would be the mildest of all of those declines. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. There’s Still Room to Fall Notice also that following the sell signals in 2022, the BPENER dropped below 5 – meaning that only 5% of the stocks in the energy sector were trading with bullish technical patterns. The sell signal last September pushed the BPENER below 40 before it stopped declining. The BPENER closed Wednesday at 59. That’s closer to overbought than it is to oversold. It suggests that energy stocks still have plenty of room to fall farther. Traders don’t need to rush to buy into the energy sector right now. Stay patient. We’ll have a better chance to buy a few weeks from now. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](