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