Friday, June 6, 2014

An oil price shock followed by a turn towards alternative energy sources?

Since mid-2012 the alt-energy(GEX) sector is outperforming the classic (oil) energy sector(XLE)

Also the conventional energy sector (XLE) is in all time highs with declining volume and the RSI is over 70 (is getting overbought).It seems it is approaching a top.

On the other hand alternative energy will probably form a nice cup and handle basing pattern (volume pattern seems to confirm this also)

Whats next?We believe that a handle will be formed towards 45 and then a bullish run towards 75-80, 100, 120.