Energy at the 50-day


Many traders watch the 50-day moving average as a trend indicator. Right now one key sector is grappling with that line: Energy.

The charts below show the SPDR Energy ETF (XLE) and Crude Oil Futures (@CL). Both are straddling their 50-day moving averages. Some trend followers may view that bullishly. (Click here for our recent coverage of oil.)

Aside from technicals, most fundamentals also seem positive for oil. Today, for instance, Energy Department data showed stockpiles of crude oil falling more than expected. Earlier in the week, President Trump and Iran exchanged tweets suggesting turmoil in the Middle East. Earlier in the month, the International Energy Agency said global production capacity “might be stretched to the limit.”

In conclusion, this isn’t a trade recommendation and everyone needs to do their own homework. But oil and related stocks may be at places where buyers could return soon.

SPDR Energy Fund (XLE) with 50-day moving average.

Crude Oil Futures (@CL) with 50-day moving average.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.