Crude Oil Testing Appetite of Long Term Bulls
After falling more than 11% in the first 3 weeks of March, crude oil finds itself re-testing a rising multi-month trendline extending back 12 months to April of 2016.
Short term momentum remains lower in the black liquid, and therefore caution is advised, but be aware longer term dip buyers could start picking away around this 47 area.
Meanwhile the SPDR energy sector $XLE corrected ahead of the drop in crude oil and now finds itself below a similar multi-month trend-line but above some key prior horizontal resistance/support.
This 68 – 70 area seems key for this group of stocks and while the same near-term bearish momentum persists, this could offer longer term opportunity if this support zone ultimately holds.
One stock that we own in the energy space right now is $VLO, which has demonstrated some nice relative strength during recent weakness [update: stopped out Friday 3/24 just below break-even].
Thanks for reading, and good luck out there.
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