Crude Oil & Energy Sector Analysis

The charts of crude oil as well as the various energy sector ETFs appear to be firming up although there is still some work to be done to make a decent case for a long side swing trade on the energy stocks as primary trend in both crude oil & the energy sector remains bearish with little to no evidence of a reversal or bottom at this time. However, there is positive (bullish) divergence building between prices & the momentum indicators on both crude oil as well as the various energy sector ETFs; XLE, XOP & XES.

Click on first chart below to expand, then click on right of each chart to advance. Gallery charts below may not appear on email notifications.

I will say that the case for a potential trend reversal & rally in the energy stocks would be in direct conflict with my bearish near-term, intermediate-term & quite likely long-term outlook for the broad market as both crude oil as well as the energy stocks tend to move in line with the broad market, particularly during periods of impulsive selling/corrections. With that being said, I wanted to pass along these charts which with some levels & potential developments to watch for going forward. For example, a break above the downtrend lines/potential falling wedges on USO (crude oil ETN), as well as the various energy sectors above, would be bullish although all of those could continue moving lower for weeks or even months before doing so, if at all.

While my confidence for a swing tradable rally in crude oil and/or the energy sector is not high at this time, nor am I sharing these as “actionable” trade ideas, merely potential trade setups pending a long entry if & when the charts continue to firm up, /CL, USO, UWT or any of the other crude oil ETNs might present a short-term trading opp for active traders as /CL rally up to any or all of the overhead resistance levels shown on this 60-minute chart with the next buy signal to come on an impulsive break above the 54.80ish resistance level.