Is the Energy Sector beginning to outperform?

Disclaimer

Readers are advised that this post considers aspects of technical analysis only and should not be relied upon as a source of investment advice. As always those wishing to invest should seek advice specific for their needs from their stock-broker or financial adviser.

Introduction

After the alarming fall in the price of crude oil in 2014 and 2015, from above $100 to a low of $28, there has been a slow but steady uptrend to be now hovering about the $50 per barrel level.

 

NYMEX WTI Crude 30 Mar 2017

Slow recovery of the Nymex Crude Oil Price

Not surprisingly, the price of crude impacted directly on the performance of the ASX Energy Sector (XEJ). As the low oil price gloom lifted during 2016, the XEJ entered into a gentle but steady uptrend channel.

 

XEJ Wk 30 Mar 2017

ASX Energy Index

Further impetus to the sector has arisen in the last 2 weeks with the realization that old coal-fired electricity generators are needing to be replaced with new gas-fired stations at a time when we will have insufficient gas reserves ourselves, after meeting our export commitments. Furthermore, the value of renewable energy electricity is limited  by our present inability to store it until needed.

Chart Reviews

This post looks at the charts of five leading energy stocks which might benefit in the current circumstances.

  1. This is a weekly chart of AGL which has already surged 50% in the past six months to outperform Origin Energy coming off extraordinary lows secondary to the low price of crude.

AGL Wk 30 Mar 2017

AGL continues to surge

2. Origin Energy, by way of contrast in this 12 month daily chart, has been range-bound the last four months but is now threatening to break-out to the upside above $7.40.

ORG Dy 29 Mar 2017

Origin Energy coming off lows

3. Oil Search. This is a five year weekly chart showing that the stock has traded in a triangular consolidation range over the last year, but that the upturn of the past week seems set to carry the share-price above resistance at $7.50.

 

OSH Wk 30 Mar 2017

Oil Search consolidating

Santos

Even this hard hit SA Oil and Gas Explorer and Producer has responded to the recent news by penetrating the down-trend line, and initiating an uptrend.

STO Dy 30 Mar 2017

Santos

5. This is a daily chart of Woodside Petroleum over the last year.  In the last week a strong upwards impulsive move has emerged which has lifted the share price from the bottom of its trading range to test resistance at $32.25.

WPL Dy 30 Mar 17

Woodside Petroleum

 



Categories: Chart Analyses, Chart Review

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