Black Gold: Crude Stocks are Cruising – Here's What I’m Watching

[Power Trends] Black Gold: Crude Stocks are Cruising – Here's What I’m Watching And then one day he was shootin’ at some food When up from the ground come a bubblin’ crude. Oil that is. Black gold. Texas tea. If those theme-song verses strike a familiar chord, you’ve watched the 1960s sitcom “Beverly Hillbillies” – either in first-run, or in syndication. Oil may still be black gold – just like it was when ol’ Jed Clampett became a millionaire. But it’s no longer just Texas tea. It’s also Saudi syrup. And OPEC petrol. And just as a rose, by any other name, would smell as sweet … oil, no matter what you call it, is never free. Especially lately. Just last month, prices at the pump drove inflation up faster than at any other time in a year. The consumer-price index released yesterday showed that prices rose 0.6% in August, with more than half of that blamed on gasoline prices that hit 10-month highs. Oil prices are driven by both demand and supply. Global demand hit all-time highs in August. And supply remains constrained by voluntary production cuts from Saudi Arabia, OPEC, and their allies. That’s a no-doubt-about-it path to higher prices. Not surprisingly, crude oil has jumped 8% in the last month to hit nearly $90 a barrel for the first time since November. You don’t have to be a hedge-fund manager or a Wall Street quant to know that that energy stocks are surging in kind. But you can use data and quantitative analytics to zero in on which stocks are the best to own. Energy Stocks Strengthen With tech companies driving index gains and topping the market-value lists, we can excuse folks for maybe not zeroing in on energy stocks as the hottest profit plays right now. But the numbers tell the story. The broad XLE Energy Select Sector SPDR (XLE) ETF – which includes companies from the oil industry, as well as gas and consumable fuels, and energy equipment and services – has surged more than 20% in less than four months. That’s three times the 6% gain in the S&P 500 during that same time frame. If we open up the [M.A.P. system]( we use in my Quantum Edge investing services, we get even more clarity about what’s been happening. All of those green bars – which I refer to as “Big Money buy signals” or “chaos spikes” – represent unusual buying activity. MAPsignals.com Also notice how few downward-pointing red bars there are. These represent the unusual selling my system picks up. And those Big Money sell signals all but dried up after June 1. So, on balance, a lot more Big Money is flowing into energy stocks than is flowing out. RECOMMENDED LINK [🚨Urgent September Warning🚨 September hits stocks hard... Fed rate decision imminent... what’s next for this market?]( As Reuters confirms “indicators flash warning sign” for this market. The Fed’s next rate meeting is just days away. And with September historically being the worst month for stocks – is history about to repeat itself? Are we doomed to see even more chaos? Legendary Forecaster Jason Bodner [just went public with this urgent video]( telling everyone... “This is where I’d move $1 million now.” And you can see why [in the first 2 minutes](. Mixed Signals My system works just as well analyzing and rating ETFs as it does with stocks. I don’t usually invest directly in ETFs. But they are great “proxies” for what’s happening in an industry or sector. And since those ETFs are composed of individual stocks, the moves those funds make can be a terrific source of investment ideas. I ran XLE through my [proprietary analytics]( and found a somewhat chaotic picture of the stocks it holds. XLE’s largest holding is Exxon Mobil (XOM). The $465 billion oil giant constitutes more than one-fifth of the entire fund. Its massive size helped push XLE higher, but it’s up only 13.5% when the overall fund has gained 20%. Exxon Mobil is a fine company. Its Quantum Score ([the overall rating assigned by my system]( is 65.5, which is good. The Technical Score, which measures momentum and internal trading characteristics, is also solid at 67.7. The Fundamental Score, which tells us the strength of the business, is a moderately lower 62.5. Add it all up and XOM is in the somewhat bland category of good but not great. It has a decent probability of moving higher, but isn’t likely to make investors a lot of money. I then dug into which XLE companies had the highest-rated fundamentals and technicals to see if anything more appealing jumped out. Two stocks tied for the highest Fundamental Score are Coterra (CTRA) and Pioneer Natural Resources (PXD). Both oil-and-gas companies rate a strong 83.4, but their technicals down in the mid-50s are weaker than I like to see. Their overall Quantum Scores are in the mid-60s, on par with Exxon. These are two stocks I would watch. And if the technicals strengthen and the fundamentals continue to rate that high, they could become buys. And speaking of technicals, the highest-rated XLE stock is Baker Hughes (BKR), the large and well-known equipment-and-services provider for oil-and-gas companies. Baker Hughes’ 85.3 Technical Score is a real attention-grabber. With the stock’s 37% run just since the start of June, that score is excellent. And since the technicals make up more than half of the Quantum Score, BKR’s overall rating of 69 is also very good, though just shy of the optimum buy zone. But the low Fundamental Score – just 45.8 – gives me major pause. Revenue has remained choppy the last three years. Profit margins are negative 2.8%. Debt is a concerning 51.4% of equity. And some metrics, like price/book value, tell me the stock is expensive on a valuation basis. The stocks with the highest probability of making you money – 70% according to my system – have [the Quantum Edge trifecta of excellent fundamentals, strong technicals, and Big Money inflows](. The companies I’ve detailed for you here aren’t quite there – yet. The XLE Winner and My Favorite The closest one to hitting all the marks – not surprisingly – is the one with the highest Quantum Score: Marathon Petroleum (MPC) at 74.1. That’s in the optimum buy zone above 70 and below 90. Technically, the stock is very strong with a score of 82.4 thanks to the nearly 50% surge since early June. Fundamentally, Marathon matches Exxon Mobile at 62.5. That’s not an ideal score and, as with BKR, there are some red flags with earnings, debt, and valuation. But I do like Big Money’s big interest in the stock of late, especially in late July and into August when my system detected 10 buy signals. MAPsignals.com I like MPC here. And if the fundamentals strengthen, I’ll like it even more. My favorite energy stock right now shines in all three categories with a Quantum Score of 87.9, a Technical Score of 85.3, and a phenomenal Fundamental Score of 91.7. My system just picked up another Big Money buy signal this week. I recently recommended it to my Quantum Edge Pro readers, so I can’t give the details away. But you can click here to learn more if you are interested. Smart investors should strongly consider owning energy stocks right now. The sector has risen in the rankings in my Quantum Edge system, and with stocks likely to lift into the end of the year, the best-positioned energy companies stand to outperform and make you even more money. Talk soon, [Jason Bodner]Jason Bodner Editor, Jason Bodner's Power Trends P.S. I also just recommended my favorite play on one of the hottest and fastest-growing trends on the planet – the massive AI boom that has already created $5 trillion in new wealth. 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