Skip to content

Energy Stocks 03222024

Good morning, everyone, and welcome to Friday morning. It’s Stephen Whiteside here from In the pre-market this morning, things are fairly quiet. There’s no major economic numbers coming out this morning. There’s some individual stock news. We’ll get to that in a couple of minutes. We do have gold trading down $15 to $20, depending on when you blink. Looking at the VIX, you can see the VIX made a new low for this move on Thursday, and then basically clawed its way back to almost unchanged on the day. The VIX is still on a daily sell signal. That’s positive for short-term market outlook. If we look at some weekly charts that I just created this morning, they’re not on the website, but I just wanted to see how the week was progressing into the weekend. The VIX is still on a weekly sell signal, so that’s supportive for a long term positive movement in the stock market. Remember, back here in October is when we got our weekly sell signal, and from that point on, the stock market has been moving higher. Now, there’s the S&P making a new high up over 2%. We’ve got the Nasdaq 100 up 2.75%. We’ve got the TSX 60 making a new high up over 1% on the week.

Then looking at crude oil, and crude oil is still positive for the week, but giving up a lot of its gains, so it’s starting to pull back a bit. Not a major concern so far. We’re not near a daily sell signal coming into Friday’s trading action, so not overly concerned. Now, the price of gold is up $23 and change on the week. It’s giving up $16 to $20 in the pre-market this morning, so we may actually end the week flat for the price of gold. Now, there’s a couple of stocks in the news. We talked about Apple yesterday having some potential legal problems, and it turned out that that’s what happened. And Apple rolled over yesterday and is back on a daily sell signal trading up a couple of pennies in the pre-market. Now, Tesla is down over 3% in the pre-market. It’s coming into Friday’s trading action already on sell signal. It was looking like we were about to get a buy signal, but that’s certainly not going to happen on Friday morning as we are trading down below the lower channel line once again. Now, I talked about the potential top in the mining sector the other day, and I may have been off by one day.

Yesterday, the mining stocks moved higher and then reversed, and we’ve got bearish reversal signals, whether you’re looking at the XGD on Toronto or the GDX or the GDXJ or the SIL, Silver Miners ETF. They all put in bearish reversal signals yesterday. Now, we’re looking to see if we get fall through to the downside today. With the commodities trading lower this morning, that may turn out to be true. So instead of Wednesday being the top, Thursday may have turned out to be the top for the mining sector. Energy stocks are still doing really well. If you haven’t already done so, it’s probably a good idea to lock in some profits. Certainly, you don’t want to We’re going to totally liquidate a position here, but when we start off and look at the commodities, they’re still doing okay. Crude oil put in a high the other day and it’s starting to pull back. On Friday on the USO, we would need to close below $75.30 33 cents. So far, crude oil is trading slightly higher in the pre-market. Gasolines pulled back over the past couple of days, so no change there. Natural gas, unfortunately, still on a sell signal.

That’s pretty well the norm for natural gas. We may have put in a higher low over the past week, and that could certainly turn out to be a bullish sign going forward. Of course, the next thing we want to see is a higher high, and we’re certainly not going to see that on Friday morning. Now, looking at the major US energy ETFs, the iShares Global Energy hit a new high yesterday. Then a new high for the XLE. Then if you’re looking at the equipment makers, we saw a new high yesterday. The Explorers put a new high, and small-cap energy stocks also put in a new high on Thursday. Now, when we look at the individual stocks, and I’m going to measure what they’ve done over the last month, not from the last buy signal on each individual stock, it’s easier to do it this way. Valero has been the big winner, followed by Marathon Petroleum, followed by Baker Hughes. Now, Baker Hughes is still negative for the year, but up a little over 15% for the month. Then we’ve got Marathon Oil up over 15%, Targa up over 13%, and then Chevron not doing well over the last month, is certainly still up on the year, but it’s underperformed the rest of the US energy sector.

Now, moving on to the Canadian energy sector. When we look at the XEG, we’re up a little over 11% for the month. Of course, the 2X Horizons Beta Pro product should be up approximately twice that, and that is certainly the case. It’s up at just under 22% for the month. Now, looking at individual stocks, Meg Energy has been the big winner, followed by Headwater, followed by Enterplus, then we’ve got Canadian Natural Resources. Now, this is the big elephant in the room. When we look at the market cap of Canadian energy stocks, you can see the Canadian Natural Resources is a little less than twice the value of Suncor, certainly more than twice the value of Imperial Oil and Cenovus. Then the stocks That’s where we have a lot of things that traders like to trade most are certainly much smaller in market weight. When Canadian Natural Resources moves, that can move the TSX-60 and certainly move the TSX. Then we’ve got Tamarack, followed by Crescent Point, followed by Whitecap. Then a couple of stocks did not do well over the last month. Paramount Resources obviously has some stock-specific problems. Then we’ve got Birchcliff, which is certainly a very popular tradable stock.

It is still on a sell signal Here’s our final here, and that would change on Friday with a close above $5.50. In summary here, all of these energy stocks and ETFs are very overbought. Remember, we look for low-risk buying opportunities off the bottom of the Panic Zones with the Pressure Zone forming, and then we’ve moved all the way up to the top of the Panic Zones here. We’re currently ranked at 10. That’s also true for an ETF such as the XLE. This is not the time and place you want to add new money to the energy sector. This is the time and place where you want to lock in profits without completely liquidating your position. And certainly, if anybody’s interested in buying energy stocks, this is not the time and place to do so. Every couple of months, you get a low-risk buying opportunity, and that is certainly not the case right now. Just enjoy it while it’s happening, and it might be over fairly soon. Okay, folks, that’s all for this morning’s presentation. So far, it looks like we’re going to have a fairly quiet open, except maybe in the mining sector, where we may see some downward pressure.

Enjoy the rest of your day. Enjoy your weekend. Next time you’ll hear my voice is on Monday morning.

Stephen Whiteside
Friday, March 22, 2024

Print Friendly, PDF & Email