Oil ETFs Break 200 Day Moving Average: Bullish Prices Ahead?
Oil ETFs broke their 200 Day Moving Average today, possibly suggesting bullish territory ahead?
Oil ETFs again broke their 200 Day Moving Average, suggesting that the bulls are again charging for higher prices. The oil spot price rose .37% to close at $94.14 per barrel, while the United States Oil Fund ETF (NYSEARCA:USO) added .65% and the United States 12 Month Oil Fund ETF (NYSEARCA:USL) added .55%.
From a fundamental perspective, oil ETFs and energy ETFs typically follow equity prices, as higher equity markets usually equal greater economic growth, thus leading to higher energy prices. Since equity markets are currently on the fence right now and facing heavy resistance into bullish territory, oil ETFs and energy ETFs will likely not break out on their own unless equities establish a firm bull market first. ETFs On The Verge Of A Breakout?
Technically speaking, the 200 Day Moving Average generally serves as a very stiff resistance point and thus is very hard to break. But, oil ETFs have broken their 200 Day Moving Averages again today, so a new bull market may be in sight. Keep in mind though that NYSEARCA:USO and NYSEARCA:USL both have RSI readings just below the ’70′ mark, indicating that these funds are reaching overbought levels and might decline soon.
Natural Gas ETFs are more or less in the same boat, as the United States Natural Gas Fund ETF (NYSEARCA:UNG) rose 1.39% today, only to have just reached the tough 200 Day Moving Average resistance line too. Whether or not NYSEARCA:UNG breaks through is up to time and investors, but with a much lower RSI and a positive MACD indicator, a bull market for natural gas ETFs seems more likely in the short term. Time To Buy Natural Gas ETFs?
Oil ETF Update:
Oil Spot Price: $94.14/barrel, +.37%
United States Oil Fund LP ETF (NYSEARCA:USO): +.65%, This ETF is a commodity based ETF designed to track the price of West Texas Intermediate Crude Oil. The United States Oil Fund LP ETF (NYSEARCA:USO) reflects the price of oil delivered to Cushing, Oklahoma and is traded as futures contracts on The New York Mercantile Exchange (NYMEX).
United States 12 Month Oil Fund LP ETF (NYSEARCA:USL): +.55%, This ETF is a commodity based ETF designed to track the price of West Texas Intermediate Crude Oil. The United States 12 Month Oil Fund LP ETF (NYSEARCA:USO) reflects the price of oil delivered to Cushing, Oklahoma and reflects the average of the next 12 months of oil futures contracts on The New York Mercantile Exchange (NYMEX).
Natural Gas ETF Update:
Natural Gas Spot Price: $3.37/ft3, +1.54%
United States Natural Gas Fund LP ETF (NYSEARCA:UNG): +1.39%, This ETF is a commodity based ETF designed to track the price of Natural Gas delivered to Henry Hub, Louisiana. The United States Natural Gas Fund LP ETF (NYSEARCA:UNG) is traded as futures contracts on The New York Mercantile Exchange (NYMEX).
Energy ETF Update:
Energy Select Sector SPDR Fund ETF (NYSEARCA:XLE): +.01%, This ETF tracks the performance of the S&P Energy Select Sector Index. The S&P Energy Select Sector Index closely tracks companies within the S&P 500’s Energy Sector, including oil, gas, and energy equipment companies.
iShares Trust Dow Jones United States Energy ETF (NYSEARCA:IYE): -.14%, This ETF tracks the performance of US Energy Stocks in the Dow Jones US Oil & Gas Index. The Dow Jones US Oil & Gas Index closely tracks oil and gas producers within the energy sector of the US Equities Market.
Bottom Line: Oil ETFs and Natural Gas ETFs are on the verge of a breakout, only if equity markets can confirm the charge.
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