Top-Ranked Sector, Major Oil & Gas, Chart.ly Charts

SPYder_Crusher

Welcome back to my column where I highlight the best user submitted chart.ly charts from a top-ranked sector of  The PPT, an analytical stock ranking engine created by iBankCoin.  The PPT ranks and scores stocks based on both quantitative and fundamental data.  These two pieces comprise the final score, known as the Hybrid Score.   I tpyically choose to sort based solely on the technical criteria, since I am a technical trader.

Here are the top five sectors as of today, 9/22/09, sorted by technical criteria:

Although I my primary sort of the 198 insustries in the database is “Technical Score,” I also like to see Hybrid Scores over 3.  In this case, all the industries have hybrid scores over 3 ( a score > 3 = composite buy signal), whereas in my last column, only two of the top five did.

I tend to like medium priced, liquid stocks.  The Mortgage Investment sector is sure to be volatile (and therefore fun to trade), but if you look at the top stocks, they’ve already had monster moves in the past week (some up + 50%) and they tend to be low priced ( 6 of the 11 in the sector are under $10).  For this reason, I have chosen to highlight sector #3, Major Integrated Oil & Gas.

The stocks in that sector are:

It wouldn’t be proper to address the “Majors,” as they colloquially known, without a quick look at Crude Oil ($CL) itself.

MontaukMack posted a clean chart showing $CL’s steady uptrend:

In assessing $CL, and it’s possible direction, you also want to look at the $USD.  The reason there is a relationship between the two is because oil, around the world, is priced in dollars.  While the value of a dollar can change, a single barrel of oil is always one barrel of oil.  As the dollar advances, it takes fewer dollars to buy the same barrel of oil. On the flip side, as the dollar declines, it takes more of them to buy that original barrel.  This is the dynamic that often causes their prices to move opposite one another.

TradingDonk just recently posited that his weekly $USD chart put in a bottom around April of 2008 at ~$72, and is forming a higher high after breaking a multi-year long downtrend line.   I don’t disagree with his assessment, but, if true, it spells trouble for $CL’s uptrend.

Another trader and Chart.ly user, CapitalEssence, comes to a similar conclusion:

Now on to the sector at hand, the Majors.  The best user chart I found is of the big kahuna, $XOM.

20characters did a great job showing last Friday showing the massive coil developing in one of the largest companies on Earth.  This is definitely one to watch on a break.

What’s the final assessment?  It’s a slightly mixed picture.  $CL is in an uptrend on a daily chart, but a longer term dollar chart shows possible bottoming action.  We know a move higher in the dollar would lead to weakness in oil.  Then, we have this giant triangle forming on $XOM, which is usually a continuation pattern (in this case, to the downside) although, a bearish view can’t be solidified until we break the lower trend line.   Based on these considerations, it looks like the short term trend in Oil is up, while the longer-term trend may still be lower.  If this is the case, then I expect the stocks in the sector at hand, Major Integrated Oil & Gas, to follow a similar trajectory.

SPYder_Crusher

SPYderCrusher is a professional equities trader with 7 years experience, whose primary focus is short-term swing trading momentum stocks. His unique 75% quantitative / 25% discretionary approach was developed over three years of research dedicated to finding high-edge opportunities, while also allowing the flexibility of adding or reducing risk as market conditions change. Before trading full-time and while in high school, SPYderCrusher founded a company specializing in film and video services to professional athletes in Southern California. After starting in 1999 and growing his business for a few years, he was able to leverage a few industry relationships into a large and valuable client base, consisting of over 100 clients and several multinational corporations. In that time, he has been contracted to travel and film professional athletes across 25 states, Canada, Mexico, Europe, Spain, and Australia. SPYderCrusher graduated with a degree in Accounting in 2008.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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