Energy Index Continues To Weaken Relative To Broader Commodities
Mike Macdonald | Nov 25, 2014 01:38AM ET
The Energy Index (NYSE:DBE) continues to weaken relative to the background Commodity Index (ARCA:DBC)), but some signs of stabilization are now appearing. The 50% retracement of the 2012-2014 rally has been all but reached, and with RSI readings oversold, stabilisation could appear in the coming weeks. It is worth noticing that whenever the RSI has traded below 20, prices have corrected quite sharply. If this were to be repeated, Energy could enter a sharp rally into 2015. For November, however, investors are advised to remain underweight.
Money managers are advised to remain Underweight Energy and monitor price action in the coming weeks.
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