Saturday, 18 June 2011

Lower pump prices to come - Energy sector next to drop

Dear Readers, I saw many topish patterns two months back and have actually called a top to the stock market in my many subsequent posts. Please click to read: "Go Defensive, protect your capital" & "Possible trend change in the making". According to the charts, the energy sector looks like the next to drop as the topish patterns are setting up for more lower prices to come, in my opinion. For investors with long positions in the energy sector, my advice is to sell, sell, sell !!

A few days back, pump operators had actually jack up the retail price of petrol. I can't fathom the rationale behind the raising of the prices. It doesn't make any sense at all. Perhaps the last draw of the blood from the general public? I foresee cheaper pump prices to come. One just need to take a look at the charts below to understand. A top takes many months to form and the energy sector now finds itself at the edge of the cliff whereby a little nudge would start the free-fall.










Direxion Daily Energy Bear 3X shares (ERY) has an inverted Head & Shoulder patterns formed over many months. Look at the volume for the past few weeks. Goodness me.... I repeat: investors who are long energy sector, SELL !!



For those of you who are not comfortable with shorting the market, please go into cash position. Good weekend to all.

 

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