WTI CRUDE NEARS TEST OF NECKLINE -- BRENT TOUCHES ONE-YEAR HIGH -- ENERGY SPDR HITS NEW RECOVERY HIGH -- LED BY PIONEER NATURAL RESOURCES AND HALLIBURTON -- OIL SERVICES ETF ALSO NEARS NECKLINE -- LEADERS INCLUDE NABORS AND HELMERICH & PAYNE
BRENT HITS ONE-YEAR HIGH -- WTIC IS CLOSE... The pledge of a joint Russian and Saudi agreement to limit oil output has pushed the commodity even higher, and has increased the odds of a major bottom being completed. Chart 1 shows the price of Light Crude Oil ($WTIC) gaining 3% today to climb above $51.00 a barrel. That leaves it just shy of its June high and a potential upside breakout above a "neckline" drawn over its October/June high. Chart 2 shows Brent Crude Oil having already done that by climbing above $53.00 a barrel for the first time in a year. ETFs tied to energy stocks are enjoying some chart breakouts of their own.
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Chart 1
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Chart 2
ENERGY SPDR HITS 15-MONTH HIGH -- PIONEER NATURAL RESOURCES AND HALLIBURTON LEAD... Energy stocks are also having a strong day. Chart 3 shows the Energy SPDR (XLE) reaching the highest level in fifteen months. Its relative strength ratio (top of chart) has also touched a one-year high. Chart 4 shows Pioneer Natural Resources (PXD) trading at the highest level in nearly two years after having cleared its spring 2015 high near 181. Its relative strength ratio (top of chart) has done the same. Chart 5 shows Halliburton (HAL) breaking out to an eighteen month high. Its relative strength ratio (top of chart) appears to be doing the same. Halliburton is also helping lead a strong day in the oil service group.
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Chart 3
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Chart 4
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Chart 5
OIL SERVICE ETF NEARS TEST OF NECKLINE -- NABORS, HELMERICH & PAYNE LEAD... Chart 6 shows the VanEck Vectors Oil Services ETF (OIH) nearing a test of a neckline drawn over its November/June highs. An upside breakout would complete a basing pattern that started in summer 2015. Chart 7 shows Nabors Industries (NBR) having already completed its basing pattern to help lead the OIH higher. Chart 8 shows Helmerich & Payne (HP) touching the highest level in sixteen months.
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Chart 6
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Chart 7
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Chart 8
SMALL CAPS AND TRANSPORTS ALSO LEAD MARKET HIGHER -- MEXICAN PESO JUMPS... Stocks are rebounding today with the price of oil. A positive sign is the ability of the Russell 2000 Small Cap Index ($RUT) to bounce impressively off its 50-day line (Chart 9). Also encouraging is the fact that the Dow Transports are very close to breaking through their spring high (Chart 10). Airlines are leading it higher today, which is impressive in the face of rising fuel costs. Commodity currencies like the Canadian Dollar and the Russian ruble are having a strong day on the jump in oil. The Mexican peso hit the highest level in a month, while Mexico iShares (EWW) jumped 3.6% (Chart 11). That, however, may be tied to the U.S. presidential election and last night's debate. The bond market was closed for Columbus Day and wasn't a factor in today's trading.
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Chart 9
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Chart 10
