Energy stocks might be overvalues against oil prices
Updated
The break of the pennant within the possible head and shoulders complex could be the deciding factor. In terms of risk/rewad I prefer to short energy stocks against oil. But the way the chart is forming on a daily metric leads me to believe the trend of stronger energy stocks against oil prices will continue in the long term.
Comment
At critical level...Trade active
ShortComment
According to this chart you should be long oil and short energy stocks, or long oil instead of energy stocks. I am long bothComment
While I maintain the view that energy stocks will depreciate in value against oil and drop into the .88 ratio level, I see the current 1.09 level as an opportunity to take some profit or do the reverse. This current level should hold to some degree. I think energy stocks will temporarily outperform oil from here. Comment
I was wrong about taking profit at 1.09. I am re-entering the trade as I see the continued downside in this ratio toward .80sDisclaimer
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