Don't Ignore This Chart!

Ignore Renewable Energy Stocks Until This Happens

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Renewable energy ($DWCREE) has been among the worst areas of the stock market to invest since topping over two years ago.  There could be reason for hope, however, as rising crude oil prices ($WTIC) could trigger interest in the group again.  There's a potential bottoming reverse head & shoulders pattern in play on the WTIC.  Should crude oil top $52 per barrel, it might be worthwhile to make an investment in renewable energy.  Take a look at the current chart of DWCREE, WTIC and PowerShares WinderHill Clean Energy Portfolio (PBW):

This chart shows that during periods of declining oil prices, focus shifts away from renewable energy.  But when crude oil is rising, renewable energy performs much better.  Should crude oil break above $52 per barrel and clear neckline resistance, I look for crude oil to move into the mid-$70s per barrel based on its pattern measurement and that would likely result in a rapidly rising renewable energy space.

Happy trading!

Tom

 

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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