The Fundamental And Technical Case For Buying The Energy Sector Now
Phil DeAngelo | Nov 19, 2014 07:06PM ET
Oil prices have tumbled 30% since July amidst a rising greenback and abundant supply gushing from the fracking boom here in the U.S. However, the energy sector’s four-month-long downtrend appears to be waning. Technical and fundamental evidence suggests that most of the correction has passed. The recent sell-off has made a bargain-buying opportunity in energy -- the most oversold sector in the S&P.
Selling onslaught in mid-October shows the sellers have all given up on the trade.
“Based on the intensity of down volume (selling) relative to up volume (buying), the energy sector hit capitulation levels in mid-October not seen since the 2002 low,” Stephen Suttmeier and Jue Xiong, Bank of America Merrill Lynch analysts 10-Q filing it issued Nov. 11 stated its repurchase plan has no monetary or term limits. The board of directors at Schlumberger (NYSE:SLB) started a $10 billion buyback plan in July 2013. Over first three quarters of this year, Schlumberger has repurchased $3.5 billion of its shares.
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