RISING ENERGY PRICES HELPING OIL SERVICE STOCKS -- BUT HURTING TRANSPORTS
OIL SERVICE INDEX TURNS UP... With energy prices staying firm, oil service stocks have turned their trend upward. [The biggest development today was the jump in heating oil prices through their 1989-1990 peak at 1.10 -- and reaching the highest level since 1979]. Natural gas stocks are also strong as a result of cold weather. Chart 1 shows the Oil Service Index rising to the highest level in almost two months. Its relative strength line has also broken out to the upside against the S&P 500. Natural gas stocks have been the strongest part of the energy patch. Chart 2 shows the Natural Gas Index bouncing off moving average support and breaking its seven-week down trendline.
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NABORS INDUSTRIES IS OSX LEADER... NBR is a definite leader in the oil service group. The chart shows the stock having broken through its November highs to reach the highest level in nine months. It's upside volume has been impressive as well.
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BURLINGTON RESOURCES IS NATURAL GAS LEADER... Over in the natural gas arena, Burlington Resources has broken through the highs of last May to achieve an impressive upside breakout -- and a 52-week high. Its weekly chart shows the natural gas leader moving up toward the highs of two years ago in the low-50s.
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TRANSPORTS HURT BY RISING ENERGY PRICES... With energy stocks so strong, it's not a big surprise to see the Dow Transports losing 3% today. The transports are actually threatening their October lows. While airlines are down, truckers are being hit the hardest.
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TRUCKERS ARE DOWN-SHIFTING... Three of the biggest percentage losers among the transports are shown below. All three have recently broken their 200-day moving averages. Among the airlines, Continental and Northwest are today's biggest losers.
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XAU HOLDING AT 200-DAY LINE... Gold prices are bouncing along with oil today. April gold is up $5.80 to $357. That's giving a boost to gold stocks. The XAU Index is still trying to hold at its 200-day average. When gold and oil stocks are strong, that's usually associated with a weak stock market -- which is what we have today.
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NASDAQ 100 TESTING MOVING AVERAGE RESISTANCE... The Nasdaq 100 Index has been leading the latest rally attempt in the market. Its chart shows that the NDX is meeting with resistance at both its 50-day and 200-day moving average. That test is important. An upside breakthough would give a boost to the rest of the market. A failure here would have the opposite effect. So far, the action is to the downside.
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