Oil Is Heading Toward a Bottom

[Jeff Clark's Market Minute]( Oil Is Heading Toward a Bottom By Jeff Clark, editor, Market Minute It’s almost time to buy big oil. In fact, traders who were looking to buy into the energy sector two months ago have a much better opportunity to do so today. The Energy Select Sector Fund (XLE) has declined 10% over the past two months. So, while the S&P 500 and NASDAQ are hitting new all-time highs, and while stocks like NVIDIA (NVDA) and Microsoft (MSFT) are trading at historically expensive valuations, the energy sector looks like a bargain. Recommended Link [The Most Important Presentation in America Right Now]( [image]( “Most people won’t know what to do when their savings run out… Or when the stocks in their portfolios fall by half,” says Wall Street icon Louis Navellier. “It’s going to affect everything about our normal way of life: Our money, the value of our homes, our ability to retire.” When it makes landfall, it’s impact will be more violent and more severe than any financial crisis we’ve ever seen… [Click here for details.]( -- An Ever-strong Sell Signal We turned bearish on the energy sector in [late-April]( when the Bullish Percent Index for the sector (BPENER) was on the verge of a sell signal. We argued, “… Traders will do much better buying into the energy sector a few weeks after a BPENER sell signal than a few days before.” We reiterated that cautious stance [last month](. The BPENER was still elevated. It was still on a sell signal. And, it looked like oil stocks had farther to fall. Now though, the BPENER is nearing levels that often coincide with the end of a decline in the energy sector. Traders who are anxious to buy oil stocks can slowly start adding exposure now. Here’s an updated look at the BPENER… [Image] [Click to expand image]( As a reminder… a bullish percent index (BPI) measures the percentage of stocks in a sector that are trading with bullish technical patterns. It’s designed to measure overbought and oversold conditions. An index is overbought when it registers above 80 – meaning 80% of the stocks in the sector are trading with bullish patterns. An index is oversold when it drops below 30. The BPENER hasn’t yet dipped below 30. So, we need some additional weakness in the energy sector before this index will generate a buy signal. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. But, the BPENER is now closer to oversold than it is to overbought. And the last time the index was near this level, back in February, the energy sector turned higher. XLE gained 20% in about two months – without the BPENER ever generating a buy signal. The energy sector may not have hit bottom yet. We could still see some weakness in the days ahead. But the sector is closer to a bottom than it is to a top. And folks who were looking to buy oil stocks two months ago have a much better opportunity to do so today. Traders should look to slowly add exposure to the sector on any weakness in the coming days. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](