Courtesy of David at the Oxen Group
Buy Pick of the Day: SPDR S&P Oil and Energy Explore and Production ETF (XOP)
The Oxen Group, for Friday, is looking at a slightly bullish market to end out the week. The Oxen Group, therefore, is excited by SPDR S&P Oil & Gas Explore & Prod. ETF (XOP), which mirrors the oil and gas exploration sector. This sector is highly influenced by oil prices, which have been on the rise and look poised to continue to gain on Friday. For one, oil prices in Asia continued to increase into the nearly $70 per barrel. Further, with the job reports coming out, signalling that unemployment may be levelling, the futures are bullish going into tomorrow. Good news for oil. Further, oil and gas exploration got some nice news, in after hours, as Mariner Energy got an upgrade from the S&P to stable. This is a bullish signal for the ETF, as well, because the company said that the company had strong production growth. Further, the merger of Petro-Canada and Suncor Energy should bring more investors to the energy sector tomorrow, as well. The real key, however, is the jobless rate. If it shows any bullish signals, whatsoever, oil could very well comfortably move over $70 per barrel. Technically, the ETF has moved up quite significantly over the past month as the price of oil has skyrocketed, but oil and gas exploration has taken a slight hit lately. The fast stochastics for XOP were moving into oversold range, and the RSI is not heavily overvalued. This means there are a lot of potential buyers that are on the sidelines ready to buy.
Entry: Recommend buying within first 15-30 minutes after slight pullback.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 38.00
