Technical analyst Jack Chan believes a correction in oil prices is underway, and advises investors to use caution in a vulnerable market.
Our proprietary indicator has turned down from multiple divergences this week.
Oil stocks as represented by $OSX remains on a major sell signal, which is now two years old.
Crude oil triggered a sell signal this week, suggesting a correction is in progress.
COT data indicates that speculators continue to liquidate, suggesting lower prices overall going forward.
Summary
Indicators are down and the oil and energy sector is vulnerable with a multiweek correction. Caution is advised.
Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Jack bought his first mining stock, Hoko exploration in 1979, and has been active in the markets for the past thirty seven years. Technical analysis has helped him filtering out the noise and focusing on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the US dollar bottom in 2011.
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Disclosure:
1) Statement and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise …read more