Summary
- Crude Oil was stuck in a relatively narrow $50-$60 price range throughout most of 2019.
- However, oil's bullish technical setup and its supply demand dynamic imply oil can go higher, probably into the $70-$80 range in 2020.
- Not all energy/oil services stocks are created equal.
- Some names you'll want to own and some you'd probably want to avoid going forward.
- This idea was discussed in more depth with members of my private investing community, Albright Investment Group . Get started today »
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3 Energy Stocks You'll Want To Own In 2020
WTI Light Crude Oil was stuck in a relatively tight $50-$60 trading range for the better part of 2019. However, oil's strong technical setup coupled with its supply demand dynamic implies that it can decisively break out above the $60 resistance level and could trade up into $70-$80 range throughout 2020.
Not all energy and oil services stocks are created equal, thus, I will discuss a few of my favorite names that are likely to outperform the market as oil moves higher throughout 2020.
Strong Technical Set-Up
Despite the relatively muted performance of many oil stocks crude oil has surged by roughly 37% over the past year. Nevertheless, oil got stuck in a relatively firm trading range of $50-$60 for much of the year.
Source: StockCharts.com
However, the technical image looks more constructive lately as oil appears set to break out of its prolonged trading range. If we look at the one year chart, in Q4 we don't see the intense choppiness and volatility that we witnessed throughout the first 3 quarters of 2019. Q4's move appears much more stable, as oil has been on a steady climb higher into year end.
Moreover, we see that oil broke through the psychologically important resistance level of $60, then came back and retested the level as a support base, and has bounced higher since. As the global economic landscape continues to stabilize throughput 2020, oil could proceed higher into the $70-$80 price range. Naturally, this would be a very favorable phenomenon for many well positioned market leading energy/oil services companies.
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