Oil Stocks Could be Due for a Comeback

Oil bulls have had a tough time of it lately. [Jeff Clark's Market Minute]( Oil Stocks Could be Due for a Comeback By Imre Gams, analyst, Market Minute Oil bulls have had a tough time of it lately. Buying the Energy Select Sector ETF (XLE) was a great trade if you bought in around March 2020 and got out in June 2022. During that period of time, XLE more than tripled in value. Since then, however, the action has been largely sideways. Recommended Link [Shame on Wall Street!]( [image]( Shame on Wall Street! They’ve collected an estimated $17 billion in payouts from a unique investment Brad Thomas calls “Amazon’s secret royalty program…” But they never told you. In fact, you won’t find it listed anywhere on Amazon’s website… Because this is not endorsed by Amazon at all. 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[(Click here to expand image)]( There are two important things going on with this chart. First, we have a clear triangle pattern in the making. I’ve drawn the outlines of the pattern using the blue trendlines. The key characteristic of a triangle pattern is sideways price action. That’s exactly what we’ve seen in XLE, as the market has traded in a $27 range for about a year. Breaking strongly above the resistance line of the triangle would signal that the pattern is complete and XLE is ready to resume its upward march. Second, we can see strong bullish divergence in the Relative Strength Index (RSI). The RSI is my momentum indicator of choice. 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. I use the RSI to assess whether market movements have real underlying strength or weakness behind them. Divergence is one of the most powerful applications of the RSI. Bullish divergence occurs when a market is either trending lower or sideways, but the RSI is trending higher. This is often a sign of hidden strength within the market. Investors who pay close attention to these kinds of signals know that eventually, the market will follow the RSI higher. Let’s take another look at XLE… [(Click here to expand image)]( The market closed at $76.97 on March 17. Almost exactly two months later on May 16, XLE closed at $76.98, putting in a perfect double bottom. While doing so, the RSI began showing signs of bullish divergence. This typically happens right as a triangle pattern is getting ready to breakout. I highlighted the divergence on the chart using the red line. That’s why it’s important to keep an eye on the upper resistance line of the pattern. If the market can break through this line, then we’ll likely see XLE head higher over the next several weeks. Energy bulls will try to test the previous all-time-high in the ETF of $101, which was established all the way back in June 2014. And as Jeff recently wrote[, seasonal patterns for oil tend to be bullish this time of the year](. Happy trading, Imre Gams READER MAILBAG Are you ready to trade oil? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. IN CASE YOU MISSED IT… [Warning: Sell all your stocks but this one! Ticker revealed]( Jeff Clark has been trading stocks for nearly 40 years. He knows the market. He predicted the crashes of 2008, 2020, and 2022. He’s helped his readers avoid huge losses… And still had 13 gains last year alone. He’s done it by avoiding 99.9% of all stocks… Only trading this one, [revealed in this video below.]( Now Jeff is helping his 23-year-old son overcome his huge losses in crypto and tech stocks… By using this same method. [Watch how he plans to win back all of his son’s losses with this one ticker revealed here.]( [image]( [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. 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