The strongest comes first. Nat Gas stocks. This market has a rising trend, although a small topping pattern is in play. We do have an excellent support zone in the upper 600's which may provide a buffer to larger losses. However, if this support zone is lost, an even larger topping pattern may in play. No idea if it will happen, but with this same pattern showing up across energy groups, it has to be noted. You can also see while we had the recent price breakout, relative strength remained range-bound .
Up next is XLE:
I'm looking at XLE for a short term trade bounce off of this trend-line. From there who knows, but relative strength is crashing.
Oil Producers:
This price trend-line confluence is just huge. A loss of the rising support line targets the high 40's. That may create an even larger head and shoulders top targeting the 2011 lows(similar to the XNG pattern). Note the ~9 month RS support line has broken. Again you can see the RSI is not that of a bull market.
Oil Services:
We have no clear direction in this market. Price, relative strength, RSI, and the moving averages really give us little information other than the 230 area seems significant for determining trend.
We can conclude energy producers are in a somewhat precarious position right now. Across the rest of the space recent breakouts were not particularly strong, but that doesn't mean they are doomed as long as support holds. Perhaps this will give us a reset and a new launching point for gains. Whatever the result, we will know more about the longer term direction in the next few months.
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