03Oct1:58 pmEST

Speeding Without Getting Into Trouble

The energy sector rotation continues to play out, with once-downtrodden natural gas suddenly looking unstoppable behind surges of buy volume to confirm the price breakout. 

Quite a few energy stocks are becoming short-term extended, which is not necessarily a sell signal or even a reason for caution if this is truly just the beginning of a new rotation and market regime. The rational behind that last statement is that the initial leg higher in a fresh rotation or bull run tends to feature the given market or sector become and stubbornly ignore overbought conditions, reflecting just how strong underlying demand truly is.

Also note the large institutions rotation over the energy, industrials, and ag space, for example, are none too concerned with short-term overbought conditions as they are moving large sums of capital and have decided to do so with conviction. For active traders, it may be a bit different, though, as we do want to focus more on sound entries. 

On that note, even with many energy stocks speeding to extended conditions, it is worth tracking fresh setups in the OIH XLE XOP energy ETFs which are not extended. 

World Fuel Services Corporation (INT) is a prime example, seen on the daily chart, below. The company specializes in aviation and marine fueling, and has acted very well in retaining a massive late-July spike higher. This is also a name well off the radar of many traders, with earnings not until October 25th. 

Wynn and Sands Have Terrible... Stock Market Recap 10/03/18 ...


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