Energy Index; Risk Of Further Weakness Into Year End
Mike Macdonald | Dec 16, 2014 01:43AM ET
The Energy Index, PowerShares DB Energy Fund (NYSE:DBE), has weakened considerably since its high in September, with prices relative to the broad based Commodity Index, PowerShares DB Commodity Index (ARCA:DBC), although currently lower by 18.5% and testing lows from December 2008 . There is a risk of further weakness into the end of the year as the bear trend remains dominant, but with RSI readings now extremely oversold, stabilization could begin to appear only in early 2015. Investors, however, are advised to maintain an Underweight stance to Energy.
Money managers are advised to remain Underweight Energy and monitor price action in early 2015.
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