Energy sector praised
The Globe & Mail, , Thursday, October 24
Tip Sheet, by ANGELA BARNES
John Roque, senior vice-president of New York-based Arnhold and S. Bleichroeder Inc., has been telling clients that he thinks the energy sector will likely be the leader in the next bull market. But at the same time, he has been admitting that he doesn't know when the bear market will end. "We like the [energy] sector because it's broad enough to support big, middle, and small-cap stocks; it's unloved and, we're guessing, an underweighted sector," he said in a technical review on Monday. He also said that while tracking crude oil is "a much sexier story and has obvious geopolitical ramifications," he thinks that natural gas merits some attention of its own.
He feels that natural gas as a commodity is a better barometer for oil service and natural gas stocks than the price of crude and says that it has had a "notably" higher correlation to the Amex natural gas index and the Philadelphia oil service index over the past two years than crude. Moreover, he noted that the technical chart for natural gas shows upward sloping 50-day and 200-day moving averages and a 52-week high in mid-October. Technical analysts use moving averages in an effort to gauge a stock or index's likely direction. Upward sloping averages are considered bullish. |
