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Mike Paulenoff is a 25-year veteran technical strategist with experience at firms including Smith Barney, Harris Upham, and Drexel, Burnham, Lambert. He has been widely quoted and published in CBSMarketWatch, Barron's and Technical Analysis of Stocks & Commodities, among many publications.
He is currently author of MPTrader.com, a real-time diary of his trades and technical analysis of ETFs that track metals, energy commodities, equity indices, international stocks, and other markets. |
Higher Oil Bullish for Clean Energy? Not Necessarily!
06/03/2008
One would think that if crude oil were about to spike to $150/bbl or higher, that the "clean energy" portfolio, otherwise known as solar stocks, would be a bit more buoyant, right? However, let's notice that just the opposite situation has developed: the PowerShares Clean Energy Portfolio (AMEX: PBW) looks vulnerable to a nose-dive towards the 20.00 support area (another 10% on the downside from current levels)! Based on my composite technical work, let's see if the PBW can hold a test of the rising 50 DMA, now at 21.39. If not, then the price structure will be heading considerably lower thereafter. Incidentally, the major components of the PBW are TSL, ORA, FSLR, JASO, YGE, STP, SPWR, ENER and ESLR. 
While on the subject of oil, if we forget about any extraneous events that may be underlying the $3 upside reversal in oil prices today, then purely based on the developing pattern in the UltraShort Oil & Gas ETF (AMEX: DUG), I have to view the action off of last Wednesday's high at 29.59 as a high-level, bullish coil that when complete should resolve itself to the upside in a thrust into a new, potent recovery upleg. At this juncture, only a decline that breaks both prior pullback lows at 29.24 and 28.15 will badly compromise the still compelling bullish chart set-up 
Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions. Sign up for a free 15-day trial to Mike's ETF Trading Diary today.
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