Taking a Look at Oil

Written by MrStockFox. Posted in Trade Ideas

This blog post by DGI prompted my post tonight.

The image above shows three charts over the last 20 years, WTI ratio against XOI Index, XOI Index, and WTI.  First I wanted to bring your attention to the verticle blue lines.  Each of these marked the lows or close to the lows in both crude oil and the oil stocks.  After the bottom was in place, it generally took the oil stocks 1-2 years before they started moving higher marked by the pink arrows.  

Lately I have been in a rush to buy as much oil stocks as I could afford, trying to take advantage of the lower prices. Although I still would like to buy more, in the future I plan to space out my purchases.  Looking at the chart above I should have plenty of time to average into companies within this sector.

In the near future I plan to add more to IBM, GE, PM and the canadian banks.

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