Is Energy derailing this rally?
December 14, 2014 MarcoTrade
It is a legitimate question to ask. Oil has been on a vicious correction. In fact US crude futures fell to $57.81 per barrel after the IEA (International Energy Agency) lowered their outlook for oil demand for 2015. The large energy sector has been suffering for sometime now and a floor below oil prices doesn’t look like a certain thing. This creates uncertainty which is exactly what the stock market doesn’t like. The S&P lost 3.5% for the week ending a 4-week winning streak. Many great stocks lost ground retracing to their 10-week moving average. It is to be seen if they will find support there. It might prove to be a secondary entry point if you did’t catch the last rally.
On the other end some sectors are expected to do better when prices at the pump drop. People tend to go out more when gas is cheap so restaurant stocks should ultimately benefit. I am keeping my eyes on CMG (Chipotle Mexican Grill). That is my favorite play right now having retraced only 0.4% for the week on a very bad tape.
Categories: Market Direction
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