By Matthew Kerkhoff
One subjective indication that a stock or commodity is close to reaching a bottom is when negative news continues to pour out, but the item's price doesn't fall past an established floor. While this is a good indication, patience should be exercised until the particular item starts to establish a new trend. Trying to tease out the beginning of a new trend before it's begun can be a disastrous endeavor. A safer approach is, just as in Dow Theory, to wait for a series of higher highs and higher lows to appear.
That being the case, it still looks premature to do much with oil or with the energy sector. The chart below shows the daily price moves of Light Crude Oil (WTIC) and as you can see, support is building out at the $45 dollar level. Today we received weekly supply data from the US Energy Information Administration showing ... Log in or subscribe to continue reading.