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Strategies & Market Trends : John Pitera's Market Laboratory
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To: John Pitera who wrote (4262)7/12/2001 11:17:47 AM
From: John Pitera  Read Replies (1) of 33421
 
I just read this and it parallels my thinking about XOI stocks.

7/11/01 2:29 PM ET

With the energy complex trading down again today -- partly on inventory numbers and partly on more coverage of the glut of natural gas currently in storage -- one pundit says the integrated oil stocks may be very close to a technical bottom.

Tyler Dann at Banc of America says his favorite sentiment indicator -- the RSI Oscillator -- is approaching bottom-like territory. "Sentiment/momentum oscillators on the integrated oil group (represented by the XOI), specifically the RSI momentum oscillator, has historically been a good contrarian indicator of futre group movement (as RSI peaks, group usually falls shortly thereafter and vice-versa). Long-term RSI range: 25-80. Current RSI: 33."

So, how to play it? He likes the integrated names if the XOI slips just a bit further. "We would like to see the XOI re-test 500-525 to initiate positions. There is not much downside from present levels of 534 to our preferred entry point, especially if crude oil does not cave to low $20s per barrel or below (we think in the near-term this is a low-probability scenario).

To his credit, Tyler has been very cautious on the names since early this year. His favorite name is ExxonMobil (XOM:NYSE). He also likes Phillips (P:NYSE) and Chevron (CHV:NYSE)which he says should do well "with more confidence in oil prices." He rates all three buy and BofA has not performed banking services for any of the companies mentioned.

Just food for thought.
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