I know, I know – the Energy Index
has been the most frustrating index and has returned virtually nothing since
mid-2009. BUT at the moment this index has popped up in 2nd place on
the short-term momentum model as well as the longer-term ratio charts. Anyways,
before we look at all the ratio charts, just a refresher –a rising ratio means that
the numerator is outperforming the denominator
Ok, so dividing the Energy Index
by the benchmark Nifty and other sector indices we can see that in a lot of
cases the ratio was flattish from mid-2015 onwards and started to breakout
somewhere around the middle of 2016. The ratio is above its 40-week moving
average for all sectors except Metals. A rising ratio against most indices suggests
that Energy could be a outperformer over the longer term and worth keeping on
the watch list – Metals popped up earlier at rank 1 for short term momentum and
on the ratio charts but it is too late to write about that now J
Note – similar situations
developed in the Auto & Pharma indices and I wrote about them here:
Will this index continue to frustrate or finally move ?..well..lets see how this plays out J
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