Crude Oil Is Due For A Correction
The Energy Report | Jun 07, 2016 01:33AM ET
Technical analyst Jack Chan demonstrates the divergence between crude oil equity prices and the underlying commodity.
Oil stocks as represented by the Oil Services Index (OSX) remain on a major sell signal, which is now two years old.
Crude oil remains on a short-term buy signal, but is due for a correction.
COT data indicates that speculation remains at levels of previous tops.
Summary
Oil and energy stocks have been correcting but oil prices remain firm, thus resulting in a divergence that has been in place for a few weeks now. According to current COT data, crude oil is due for a correction; caution is advised.
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