Crude Oil Rally Should Carry into 2007
- Stocks are Leading the Way -
from ChartWorks:: published by
Institutional Advisors
Bob Hoye
Technical observations of RossClark@shaw.ca
December 2nd, 2006
The seasonal low in Crude Oil appears to be in place. The higher low in the CCI(20) index followed by a move through zero should be the precursor to a five to eight week rally, a pause and then a continuation to the upside into March-April.
Since 1983, the level of the lower Keltner Band has provided a major support once the 50-week moving average was violated. The ensuing rallies have managed to retrace 50% or marginally more of the break since the last rally above the upper Keltner Band. The failed rally into August 11th ($77.70) becomes our measuring point for the current retracement. We can assume that the initial rally will carry to $67, but not beyond $70.
As noted on November 21st, the oil stocks were already putting in higher lows, creating a bullish divergence and ready to pop.
Three tradable indices are showing good strength
Canadian Energy iShares (XEG.TO)
OIH
XLE
Many of the energy stocks are moving through their resistance levels on expanding volume. Here are the individual ones that jumped out in our observations tonight and are showing leadership.
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Bob Hoye
December 2nd, 2006
EMAIL:: bobhoye@institutionaladvisors.com
CHARTWORKS WEBSITE:: www.institutionaladvisors.com
