Energy Sector: buy or avoid?

The energy sector has been tossed around a bit, given geopolitical events in Russia and Iraq . Geopolitical events, BTW, has been the “catch phrase” of the past decade – for obvious reasons.

Below are some mid termed and short termed charts for WTIC and Nat. Gas. The second “season” for energy stocks is upon us—the first and more powerful of the two best times to own energy securities having ended in May. Energy tends to have a better than average return between late July and early October. I did mention a couple of energy stocks on BNN last night, including adding one as a “top pick”.

Here is the link to my Globe & Mail article regarding the top picks: http://www.bnn.ca/News/2014/8/19/Keith-Richards-Top-Picks-Unilever-Enerplus-Energy-Cash.aspx

Here is the link to the video clip for the show: http://www.bnn.ca/Video/player.aspx?vid=419800

BTW—I was privileged to receive a BNN coffee mug from host Michael Hainsworth. I’m telling you, these things are coveted like gold (actually, gold is less attractive as an investment than a BNN mug these days!) by us BNN guests – I’m afraid to drink from it lest I spoil the finish! Here’s a “mug shot”!

I’ve presented this long termed chart (above) with the large symmetrical triangle on this blog many times before. Oil is currently nearing the bottom of the triangle. That may be a time to buy, but only if we see some strength show on the daily chart (below). At this point, the daily chart shows us that oil is oversold, but the momentum indicators that I watch (RSI, MACD, stochastics) are not yet hooking up. Moneyflow remains bearish (top and bottom panes). For that reason, I am focusing only on individual names within our ValueTrend platform at this time.

Natural gas has retreated, but is showing signs of bouncing off of a trendline on the longer termed chart, below. Should the market drive it up from here, our target would be $5. Moving averages are still bearish on the daily chart, but there are some signs of life as the momentum indicators attempt to bounce off of their low points. Moneyflow is also showing some signs of a turnaround. It’s early yet, but Nat Gas may be ready for a rally.

All in, we’re selectively holding two stocks (10% of our portfolio) in oil and natural gas companies within our ValueTrend portfolio. Both are covered on the BNN show from last night.

As always, please post your comments below. I’m particularly interested in knowing what sectors readers are interested in . While I don’t like to cover too many individual stocks on this blog (unless they are very widely held), a broad sector coverage is usually of interest to a large number of readers. Please feel free to comment on any ideas you would like covered within sectors, or international markets.