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business newsExxon, Energy Drop Still Have Long Way to Go
There's money to be made on the downside.
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Last week I wrote a piece called Cashing In on Energy Drop, which I hope allowed Minyans to mint a little coin while others were scrambling for security.
Now that many of these charts have broken down significantly, I find it worthwhile to update my thesis a bit and look at what we should expect from this point forward.
First, however, let’s take a look at some before and after for the Select Energy ETF (XLE), Transocean (RIG) and Exxon-Mobil (XOM):
Select Energy ETF, September 3
Chart courtesy of Telechart, www.worden.com
Select Energy ETF, September 10
Chart courtesy of Telechart, www.worden.com
Transocean, September 3
Chart courtesy of Telechart, www.worden.com
Transocean, September 10
Chart courtesy of Telechart, www.worden.com
Exxon, September 3
Chart courtesy of Telechart, www.worden.com
Exxon, September 10
Chart courtesy of Telechart, www.worden.com
Clearly you can see that each of the charts mentioned has already broken. Many will believe the move is over. However, it's always important to remember that trends last much longer than most can imagine. Furthermore, one of the reasons it’s hard to conceptualize how far a short can run is because we’re not trained to view them in this manner.
I always like to tell people who are nervous when shorting to simply turn their monitor upside down: To wit, here's an upside-down Exxon chart.
If this were a long, you would obviously feel comfortable jumping aboard and holding on for the next 20 points. I'm getting rid of the existing short inventory I have, and looking to add much more on the next light volume pullback… er, bounce.
This energy drop has a long way to go, and can make the savvy trader much money on the downside.
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