• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Energy is on Fire
Stock

Energy is on Fire

by April 5, 2024
by April 5, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Strong Rotation on the Weekly RRG

For a few weeks already, the improvement in the energy sector (XLE) is becoming increasingly visible in the lengthening of the XLE tail on the Relative Rotation Graph.

The recent rotation from lagging into improving on the weekly RRG is now starting to pick up steam and also move higher on the RS-Ratio scale indicating a further improvement of relative strength.

Daily Rotation is Confirming Strength

This improvement is further emphasized on the daily RRG, where we find the XLE tail well inside the leading quadrant with a recent “hook” back up, after a dip in relative momentum.

Clockwise vs Counter-Clockwise

As a side note, this is a good example where a tail “seems” to be making a counter-clockwise rotation. But in reality, under the hood, on a smaller time frame, there is a clockwise rotation visible.

In this case, the pivot on the daily tail was on 4/1 (no joke). When I zoom in on 4/1 and the surrounding days using an hourly RRG. A clear clockwise rotation shows up.

Price Breaking Major Resistance

The energy sector was also mentioned in my previous article as one of the sectors that was close to breaking a major overhead resistance level.

This is now happening. With the excess supply of around $94 now out of the way, new upside potential was unlocked. This will certainly help further improve the relative strength of this sector.

Industries

From the sector summary page, we can dive deeper into the energy sector by opening up an RRG that shows the rotations for the various industries inside the sector. Just click on the small RRG icon at the end of the line.

Initially, this RRG will use the $SPX index as the benchmark. The overall strength of the sector is clearly visible in all groups, except Coal, moving inside the improving quadrant at a positive RRG-Heading.

But things change when we switch the benchmark to XLE, which allows us to see the rotation of these groups within their own universe. We already know that the sector is doing well, but which industries should we focus our attention on?

Exploration & Production Stands Out

This changes the picture tremendously and immediately shows that there is really ONE group that is leading the Energy sector. And that is Exploration and Production.

The price chart for this group speaks volumes. The upward break already happened a few weeks ago, and now relative strength is really picking up pace, with both RRG lines turning higher above the 100 level and pushing the tail further into the leading quadrant on the RRG.

Zooming in on Individual Stocks

Loading the predefined RRG for members of the Energy sector and then hiding tails/stocks that are not in exploration and production gives the RRG above.

Going over the individual price charts reveals that the stocks inside the leading quadrant, the cluster in green, has already made a significant move higher in price terms. They have been leading the initial rally for this group.

When looking for better risk/reward opportunities, the tails a little more to the left and even inside the lagging quadrant probably offer better probabilities. Remember, the sector and the group are already doing well so these stocks are well inside the improving or leading quadrant and traveling at a strong heading when you use $SPX as the benchmark.

One of these stocks is OXY. Its tail has just moved into the improving quadrant, albeit still a short tail its moving in the right direction. The upward break in the price chart this week will certainly help a further improvement in relative strength and likely make this one of the new leaders in this industry.

#StayAlert and have a great weekend, –Julius

You Might Also Like
  • Gold Mining Stocks vs Gold: What’s the Turnaround Trigger?
  • Is Aflac Set to Surpass Analysts’ Targets? Find Out Now!
  • Top Ten Charts to Watch in November 2023
  • Mag 7 Stocks in the Spotlight as Stock Market Recovers
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Silver’s Surge: Can It Reach $50 an Ounce This Year?
next post
Jobs In the Spotlight: Stock Market Reverses Course After Massive Selloff

You may also like

New SPX Correction Signal! How Long Will It Last?

March 19, 2025

Missed Amgen’s 5% Surge? Here’s What You Need to Know...

February 5, 2025

Going, Going, Gone: End of Week Themes with GoNoGo Charts

January 21, 2023

Who will Win the Battle for the 200-day SMA?

November 4, 2023

Equity and Inflation Outlook — Watch These Videos!

November 21, 2023

MEM TV: Check Out These Bright Spots in a Weak...

August 12, 2023

Californians Caused Late October Dip (and Rebound)

November 17, 2023

Market Secrets Revealed! Final Bar Mailbag — US Dollar, S&P...

November 27, 2023

Crude Oil at Major Price Low, Per COT Report Data

April 13, 2023

The Ord Oracle July 11, 2023

July 13, 2023

    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

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

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

      June 27, 2024 2,630 views
    • 2

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

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

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

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    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

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    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

    GNG TV: S&P Rallies Back to...

    November 4, 2023

    Where Are We? Can We Say...

    May 14, 2023

    S&P 500 Above 5400: Economic Optimism...

    June 13, 2024
    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