Agreed:
The Year's Best Opportunity to Profit on Oil
By Jeff Clark
We are approaching the best oil-stock buying opportunity of the year.
I know that sounds ridiculous. After all, the American Stock Exchange Oil Index is down 15% on the year. And Big Oil companies like ExxonMobil, Chevron, and ConocoPhillips are down 15% as well.
The price of oil, though, is 50% higher today than it was when it started 2009. So, what is the problem with the stocks?
Frankly, I don't know.
I wish I could tell you the oil stocks outperformed crude oil late last year and the sector rallied ahead of the commodity. But it didn't. Oil stocks bottomed with the overall stock market back in March.
Since then, the gains have been modest at best. At worst, they've vastly underperformed the remarkable rally in the price of crude oil itself. But that's about to change. My No. 1 oil stock indicator is about to turn bullish. Take a look...
The Bullish Percent Index measures overbought and oversold conditions. The index ranges from 1 to 100. Any reading below 10 indicates the sector is oversold and investors should prepare for a rally. A reading above 70 indicates the sector is overbought and may be ready to decline.
You can see how this chart matches up against the performance of the AMEX Oil Stock Index...
The blue arrows indicate Bullish Percent Index buy signals. Each one preceded a rally of more than 20%.
Recently, oil stocks peaked in early June and have been trending lower ever since. But they're rapidly approaching the oversold level.
Commodity Q&A: These Oil Stocks Could Rally 80% on Falling Oil Prices
Try Making These Extraordinary Gains in ExxonMobil
As soon as the Bullish Percent Index drops below 10, we'll want to be ready to buy the oil stocks. It may be the best opportunity to profit off the sector this year.
Best regards and good trading,
Jeff Clark
http://www.growthstockwire.com/index.asp