There’s an old joke among traders…
Person A asks, “Why did the market go down?“
Person B replies with the honest answer, “There were more sellers than buyers.”
You see, pundits and so-called “experts” always try to come up with some immediate “cause” for market movement. But ultimately, it’s all about buyers and sellers.
With more buyers, the market goes up. And with more sellers, it goes down.
We’ve seen that play out across the market over the past couple of months… The S&P 500 Index is down around 4.5% in that span.
And tech stocks have suffered even worse… The tech-heavy Nasdaq Composite Index is down roughly 9% over the same period.
You can try to explain these declines any way you want. In the end, though, it was simple…
There were more sellers than buyers.
But importantly, even in a “sea of red” like that… you can still find winners.
In fact, two months ago, we covered all the details about one of these winners in waiting in this publication. It’s up around 20% since then, while the broad market is down.
So today, I’m taking a small victory lap. But even better, you’ll see that our Power Gauge system still rates this opportunity as “very bullish” right now…
On December 10, I wrote an essay titled, “How the Mainstream Media Is Getting Big Oil Wrong.” In it, I laid out the case for why energy stocks still had “plenty of upside ahead.”
Specifically, I focused on the Energy Select Sector SPDR Fund (XLE)…
XLE’s top two holdings are household names – ExxonMobil (XOM) and Chevron (CVX). It also includes other oil and gas producers, like EOG Resources (EOG) and ConocoPhillips (COP). And it includes oil-services companies, like Schlumberger (SLB) and Halliburton (HAL).
So as you can see, it’s a great representative of Big Oil.
On December 10, the day of our essay, XLE closed at $57.24 per share. And it closed yesterday at $68.42 per share – a roughly 20% increase in two months.
That’s pretty amazing when you consider the broad market’s performance in that span.
Finding this opportunity was easier than you might imagine, too…
I used the Power Gauge.
Our proprietary system rated XLE as “very bullish” in early December… And it still does today.
In addition to this top rating, the Power Gauge’s Chaikin Money Flow reading shows us that professional investors are now jumping into the energy trade as well. And the Power Gauge is “bullish” or better on 17 of the 21 stocks in XLE right now – with zero “bearish” grades.
In short, the Power Gauge sees further upside in the energy sector.
Now, maybe you think that energy stocks are boring. Or perhaps you’re looking to catch a bounce from the recent tech wreck.
Well, I encourage you to take your cue from the Power Gauge today instead…
It’s picking winners out of a sea of red – like XLE. This opportunity is already up roughly 20% since I first shared it with PowerFeed readers about two months ago.
But that doesn’t mean you’ve missed out on this winner. Check it out.
Good investing,
Carlton Neel
