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Signs Point to Run in Old Energy Stocks


ERX, Old Energy Stocks

There are several indicators pointing to a move in old energy stocks.

Released on Tuesday, May 2, 2017, 6:45 AM ET
by Email Russ UrbanContact SpeculatingStocks

Pittsburgh, PA (SpeculatingStocks) - Old energy has been out of favor the past few years as the Obama Administration has propped up green energy and heavily-regulated old energy such as coal and coal power plants. The Trump Administration has made major promises in coal country and has removed coal regulations. Even offshore drilling is now becoming easier again. As you can see, the energy arena has flipped flopped.

This scenario has created extremely cheap, beat down stocks in old energy. For a list of Old Energy Stocks, see the SpeculatingStocks Old Energy Stocks Bucket.

Why is old energy at such a grand crossroads right now for investors? First, the scenario above is in old energy investor's favor. Second, Crude Oil is right above its 200-day moving average, which it has been riding higher at this point each time. Third, the leader in oil, Exxon (NYSE:XOM) just closed above its 50-day moving average yesterday. Fourth, oil and natural gas are both in the green heading into today's open. Fifth, a couple beat down coal plays, Consol Energy, Inc. (NYSE:CNX) and Westmoreland Coal Company (NASDAQ:WLB) had bullish moves yesterday. Sixth, May is usually when energy stocks start to propel higher, especially this year with tech so overheated with profit-taking expected from tech at some point soon.

Old energy has its share of detractors, but with government backing, these companies have another life in them and many green energy companies were being propped up by subsidies. Green energy such as solar is just not ready yet, solar cells just aren't fall enough along yet to be considered a viable solution to energy. Electric cars still need powered through the power grid which likely leads to a coal power plant.

A run in old energy would send 3X ETFs running significantly higher such as: 1) Direxion Daily Energy Bull 3X (NYSE:ERX), 2) Direxion Daily S&P Oil & Gas Exploration & Production 3X ETF (NYSE:GUSH), 3) Direxion Daily Natural Gas Related Bull (NYSE:GASL), and 4) VanEck Vectors Coal ETF (NYSE:KOL).

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⇒ About the Author of this News Article:

Russ Urban has been following the stock market for over 17 years and holds a Bachelor's Degree in Finance. From a young age, he watched CNBC with a keen eye and became obsessed with the market and technology. Russ Urban has written hundreds of stock articles and stock picks through the years since he founded, Inc. in 2006 and holds strong faith in the power of the markets and capitalism.

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