Chartists are not that different from trial lawyers. They gather evidence to make their case and if it is strong enough their trades are winners. This seems to be the case this month in the energy sector as chart patterns, commodities and fundamentals are coming together. The fundamentals seem to add icing to the cake to make the sector rather palatable to investors of all types.
Add these together - a constructive long-term pattern for energy stocks, a possible upside breakout in the underlying commodity and a seasonally strong backdrop for stocks in general and the evidence points towards opportunity. As mentioned, the icing on the cake is small set of fundamentals. Again, I am out of my element here but when a stock such as the French integrated oil giant Total sports a price/earnings ratio based on current year’s estimates of 7.2 and a dividend yield of over 5% even a chartist should take note.
Source: Market Watch
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Posted by D4L | Monday, November 07, 2011 | ArticleLinks | 0 comments »________________________________________________________________
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