On the 2-year chart we can see the long-term downtrend in force from mid-2014. A recovery rally here may not get as far as the 200-day moving average, since it might get capped by the upper boundary of the downtrend channel. Even so, if it makes it there it will get to about $39, which would be a tradable rally that would result in good gains in many beaten down stocks across the sector. Such a rally looks likely given that the outlook for the broad market is now positive over the short to medium-term.
The long-term 10-year chart shows how the latest severe downleg took the oil price way below its 2008 - 2009 crash lows, despite the broad market itself not crashing. What this means is that if the broad market does later crash, oil could easily end up in the teens. The recent very heavy volume, that can be seen more in context on this long-term chart, is a sign of at least a temporary bottom.
Compared to oil itself, oil stocks got off light, and have not dropped below their 2008 - 2009 crash lows. The reason for this is simple to understand - it is because the stockmarket has not crashed - yet, although it may do later. On the 6-month chart for the XOI oil index, we can see how it dropped hard from mid-November into mid-January, exactly as predicted in the last update, and it has since thrashed around marking out an intermediate base pattern from which it only started to emerge yesterday, after first breaking out of the downtrend shown and then battling through its falling 50-day moving average, which it only succeeded in breaking clear above yesterday. Yesterday was an important positive day when not only did the XOI succeed in breaking clear above its 50-day moving average, but also it broke clear out of the intermediate base pattern of recent weeks. This action signifies that it is commencing a recovery uptrend that will probably take it to the upper boundary of the downtrend shown on the 2-year chart, resulting in significant gains in many trampled down undervalued oil stocks. This expected move should unfold against the background of the broad market advancing during the same timeframe.
On the 2-year chart we can see how, having completed an intermediate base above the lower boundary of the long-term downtrend shown, the XOI is in position to stage a tradable rally across the downtrend channel. However this downtrend remains in force with moving averages in bearish alignment, and so may reassert itself after the expected rally back across the channel.
Vad gäller vad jag väljer för bolag för att positionera mig mot denna uppgången så är det enkelt att sammanfatta: Canacol, jag ökade igår på 3.57 - 3.58 på ett konto där jag inte var jättetungt viktad. Jag räknar med att bolaget i natt efter stängning redovisar zon 3 av OBOE1. Efter det räknar jag med att analytikerna spinner loss :-) och att bolaget inom några veckor rapporterar KRAFTIG expansion i ett Colombia som är i panik pga elbrist, ansvarig minister fick just sparken och i storstaden Cartagena som Canacol levererar sin gas till diskuteras att köra in antal timmar per dag utan el.