Oil Struggles
Igor Manukhov - Jun 02, 2023
Oil continues to struggle against the overall stock market, though a relief rally is possible.
Oil and energy stocks have been one of the best investments coming out of the pandemic lows of 2020 up until the middle of last year. Ever since, oil seems to have lost it's way against the overall stock market. Not only price is in a downtrend but it is also underperforming Canadian stocks (green line) as well as US stocks (red line). For these reasons we had exited our oil positions earlier.
For those that still hold some oil or energy stocks there might be a relief rally coming. Notice that the momentum of oil price declines has been steadily going down (pink lines). Momentum has been forming a divergence with the actual price. Historically this set up signals a potential reversal or a relief rally of some sort. That might present an opportunity to sell some oil stocks if you have to.