BHT identifies meaningful trends and important supply and demand levels in the financial markets. An understanding of these dynamics will add Alpha to any investment strategy. The following are important factors to consider in the Energy and Energy ETF markets.
Oil - Oil is trending higher and approaching levels that have been resistance in the past. The Fake News Financial Media talks about the $50 level, but to be more precise it's really closer to the $51-52 level. These levels are important going back to 2015.
Natural Gas - Natural Gas broke the lower end of its recent range, but it is oversold. If current levels break there may be a meaningful selloff. Longer-term, the $2.50 level has been important support. It was the low last August, November, and again in February. If it trades down to these levels again there will probably be support there.
XLE – S&P 500 Energy Sector ETF - The XLEs broke short-term resistance at $66 but are overbought. They have rallied since finding support around $64.50. There was support at this level because the last four times they traded down to around it, a rally followed. They have broken the downtrend that began in December.
XOP – S&P 500 Oil & Gas Exploration & Production ETF - The XOPs sold off down to $30 after breaking support around the $32.50 level in early June. There was support there because it was support during last May, June, and August. It is now a resistance level. They are in an uptrend after rallying off of the $30 level.
OIH – VanEck Vectors Oil Services ETF - The OIHs continue to consolidate around the $24.50 level. There is resistance around $26.50 because it was support from April through November of 2016. There is support around $24.50 because it was top of the range in early 2016.
AMLP - Alerian MLP ETF - The AMLPs sold off sharply after breaking important support around the $12 level in early June. This level was support last June, September, November and December. After breaking their downtrend and rallying off of the $11 level, they are now back up to $12. They have been consolidating for the past month.
IXC – iShares Global Energy ETF - The IXCs have trended higher since early July. Now they are testing resistance around the $32 level. This level was support in November of last year, and in March, April, and May.
KOL – VanEck Vectors Coal ETF - The KOLs are consolidating above the important $14 level and trading near the recent highs of early March. The $14 level is important because this is where they were trading in early 2015 before the large selloff began. It was also resistance in November.
FAN – First Trust Global Wind Energy ETF - The FANs are consolidating just under resistance around the $13.50 level. This level was also resistance last August and September, and in June of 2014. Each time was followed by a significant selloff. There isn’t clearly defined support until they approach the $12 level.
TAN – Guggenheim Solar ETF - The TANs have been trending higher since breaking resistance around $19 in late June. If they head lower there will probably be support around this level. They will probably run into resistance around the $22 level because it was resistance last year from May through August.