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Energy: Buy the shares, sell the commodity?

posted 574 weeks ago on BloggingStocks

Filed under: Indices, Market matters, Technical Analysis, Oil, S and P 500Over the past six months, the S&P energy sector has risen by 8.3%, outpacing the 5.5% fall in the S&P 500 index by a substantial margin. Of course, the gains in energy-related shares are modest in comparison to the 51% rise in the price of crude over that same span. History suggests, however, that while the two can slip out of sync for a while, they tend to loosely track one another over the longer term Under the circumstances, the recent sharp slide in the ratio of the energy index to the price of crude oil suggests the shares may be poised for at least a short-term technical bounce relative to the underlying commodity. One way to play it (depending on risk tolerance): buy the Energy Select Sector SP

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