Don't Ignore This Chart

Ignore Renewable Energy Stocks Until This Happens

 | 

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

 

Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015. Learn More
Subscribe to Don't Ignore This Chart to be notified whenever a new post is added to this blog!
comments powered by Disqus