September 1, 2023, 11:18 am EDT
Energy Standing Out
While the stock markets are in a consolidation process with pullback and rebound, one sector stands out to make a fresh 6-month high. It is the energy sector.
Checking out the following popular energy ETFs so that one can validate the strength of this sector:
- Oil Services ETF (OIH) +2.9%
- Energy Select Sector ETF (XLE) +1.5%
- United States Oil Fund ETF (USO) +1.5%
Investing in energy ETFs and stocks is never an easy task due to its volatility and complexity involved. Usually, energy or oil is closely related to the geo-political environment. For example, oil producers OPEC can adjust oil prices for their profits. Also, sanctions, wars, and US dollars could quickly impact the energy sector. Lastly, the global economy in terms of the demand side play critical role in the supply-demand formula.
However, it is straightforward to understand the total outcome of all these factors combined. Using technical analysis or its price action we can make investment decisions relatively simple.
When a stock or ETF makes a fresh high for 3-month, 6-month, or 1-year after a base, it definitely means a bullish bias.
Therefore, we consider the energy sector is a emerging sector to pay attention to. There are also many energy stocks to check out once we know that the energy sector begins to surge.