• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing Should you buy oil given the unprecedented divergence with energy stocks?
Investing

Should you buy oil given the unprecedented divergence with energy stocks?

by December 21, 2022
by December 21, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

December is a time of reflection and planning for financial market participants. Everybody is preparing for the holidays and what 2023 might look like, and the energy sector looks very interesting.

Throughout 2022, the energy crisis shaped the world’s economies. After the war in Eastern Europe started with Russia invading Ukraine, oil prices skyrocketed to over $120/barrel.

The level is nothing short of impressive, given that oil traded at -$40/barrel only a couple of years ago. Therefore, we can say that the road from negative prices to over $120 was certainly one of the most spectacular rallies in the oil markets ever.

But crude oil prices topped this year after the WTI traded above $120/barrel. From that moment on, the WTI lost all of its 2022 gains and now trades almost flat on the year.

However, one studying the energy sector cannot ignore one unprecedented divergence between oil and energy stocks. That is, while the price of oil declined in the past 100 trading days ending mid-December, the energy sector had surged.

Historically speaking, traders should prepare for an oil rally, as this is how such a divergence is typically solved. So what are the technical levels to watch and is it fair to assume an oil rally in 2023?

WTI crude oil caught between resistance and support

In light of the above-mentioned divergence, it would be interesting to see what level would be first broken by the WTI crude oil price – support at $60/barrel or resistance at $120/barrel?

WTI crude oil chart by TradingView

The double top pattern appears to be resolved as the market already traveled the equivalent of its measured move, but more weakness might lie ahead as the double top is a reversal pattern.

However, in the grand scheme of things, the recent price action from the past 100 trading sessions looks like a healthy correction. Therefore, considering the unprecedented divergence from energy stocks, one should not be surprised to see oil prices rally in 2023.

Finally, if a new attempt at $120/barrel is in the cards, central banks will have difficulty fighting inflation as higher oil prices fuel inflation.

The post Should you buy oil given the unprecedented divergence with energy stocks? appeared first on Invezz.

You Might Also Like
  • How Much Do You Need to Start Trading Options?
  • Should you buy JPMorgan stock after its Q4 earnings?
  • What Are Covered Calls And How Do They Work?
  • What Happened to SFOMag? Stocks, Options and Futures Magazine
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Nike shares rise after robust quarter results but will the stock break this key level?
next post
Activist: Six Flags can double its stock price if it does this

You may also like

Five Below breaks out. Here is the next target for...

November 25, 2022

Compass Inc will turn free cash flow positive in 2023:...

January 9, 2023

The Sell Put And Buy Call Strategy | A Synthetic...

April 16, 2023

US nonfarm payrolls surpass expectations to rise by 263,000; Wages...

December 2, 2022

Activist Dan Loeb ups his stake in Bath & Body...

December 9, 2022

Gene Munster: ‘AAPL should be a $250 stock’

January 4, 2023

Aston Martin Lagonda: Will this fallen angel recover in 2023?

December 6, 2022

Diageo share price forms a wide symmetrical triangle

November 25, 2022

SPX Options vs. SPY Options: Which Should I Trade?

March 15, 2024

Cramer reacts to FTC complaint against Microsoft-Activision deal

December 9, 2022

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,309 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past...

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    12 Tips For Building Long-Term Wealth

    August 11, 2023

    As Glazers seek sale, how much...

    November 28, 2022

    Options Delta Explained: Sensitivity To Price

    April 22, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here