The Profound Weakness Of Oil And Oil Service Stocks: 5 Charts

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An examination of the under performance of energy stocks with 5 price charts of oil and oil service stocks.

The oil and oil service stocks are under performing the rest of the market. It's peculiar that these price charts for that sector were unable to even come close to their 2018 highs at a time when the major stock market indexes were getting it done. Some of these charts show that prices have taken out support levels going back years and a trend downward is basically unabated.

Here's the daily chart of the Energy Select SPDR fund with the symbol $XLE -- versus the S&P 500 exchange traded fund. To put it another way: this is $XLE in $SPY terms. To give you an idea of what the energy index is tracking, its top 3 components are Exxon Mobil, Chevron and ConocoPhillips. The ETF also contains oil service stocks, independent producers and a pipeline outfit. Basically, this is how the oil sector looks against the market as a whole:You can see how we've this month closed below the late December, 2018 closing low.

For a clear idea of the under performance in the oil service sector, here's the Schlumberger daily price chart:What's significant here is the inability to rise back to the 2018 high prices -- at a time when the S&P 500 and the NASDAQ Composite have done so. The decent rally off of the late December lows is in danger of being retraced.The price of a share of Schlumberger has dropped in half from the beginning of 2018 to now. It's gone from about 80 to about 40.

I do not hold positions in these investments. No recommendations are made one way or the other. If you're an investor, you'd want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.

 

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