Market Overview

How To Play An Oil Turnaround (If It's Happening)

Share:
How To Play An Oil Turnaround If It's Happening
Related APC
Credit Suisse: Warmer Weather Impacts Natural Gas Storage
Credit Suisse Unleashes Wave Of New Energy Coverage
Related XLE
Technical Strategist Turns Cautious Amid Parabolic Run: 'Healthy Correction May Be Just Around The Corner'
In A Year When Bitcoin Stole The Spotlight, Energy Was An Underappreciated Winner

Oil prices have been nearly halved since 2014, pushing energy stocks lower and leading investors to wonder where the bottom is.

While most analysts agree that prices will eventually recover as economies around the world pick up and supply and demand level out, the question of when prices will make their way higher remains elusive.

However, for brave investors who believe that 2016 is the year oil prices will finally begin to recover, this could be a money making year.

Related Link: Deutsche Bank Says $55 Oil Predicted Weeks Ago Now Seems Unreasonable

Numbers Suggest Improvement Is On The Way

Chris Kimble from Kimble Charting Solutions told Market Watch that data suggests that oil prices could be nearing a rebound. At the moment, crude oil prices are poised to have their worst 18-month drop in history.

Historical data shows that when prices fall up to 40 percent, the average 12-month return is 42 percent, with oil trading positive 98 percent of the time. According to his research, Kimble believes the commodity is due for a turnaround.

How To Play

For investors looking for a broader investment option, funds like the Energy Select Sector SPDR ETF (XLE) that provide exposure to the industry as a whole could be a good choice. Companies like Anadarko Petroleum Corporation (NYSE: APC), Baker Hughes Incorporated (NYSE: BHI) and Halliburton Company (NYSE: HAL) have all received positive ratings from a number of analysts.

Posted-In: Commodities Markets Trading Ideas Best of Benzinga

 

Related Articles (APC + BHI)

View Comments and Join the Discussion!