Looking for the Energy Bottom

With a so much credit for this bull market due to a major pullback in energy prices it will be important to keep an eye on crude in the coming weeks. A further decline in crude prices should fuel, no pun intended, further stength in the dow (DIA) and S&P 500 (SPY) while a reversal would have the opposite effect. Currently light sweet crude is in a decending broadening wedge. This weekend I found a very useful site run by Bulkowski based in his books, check it out. Watch for that upper trendline to break, thats when i would look at longing some beaten up oil stocks like ADM or the OIH, not they have already begun to moke back up.

There is no denying the magnitude of the bull market in stocks we have right now. Here are a few awesome looking breakouts in stocks that surprised me:



At some point patient traders will make a killing shorting this buying frenzy. One stock that is looking a little top heavy is Energizer (ENR). If you spot a confirmed reversal I think it could give back much if not all of this recent parabolic move: