Last week’s OPEC meeting was seemingly ordinary, which is exactly what many Wall Street analysts were hoping for. Global oil market fundamentals have been improving, and Goldman Sachs analyst Brian Kinsella sees plenty of buying opportunities in the Energy sector now that the OPEC meeting risk is out of the way.
Kinsella believes that natural gas plays, which have already benefitted from a 15 percent surge in Henry Hub prices due to warmer-than-expected weather forecasts, have more upside potential in the near future.
“The pain trade is likely higher for gassy E&Ps—given still elevated short interest on a ‘days to cover’ basis—if gas prices continue to grind higher, despite valuations largely reflecting the natural gas strip,” he explains.
Kinsella also mentions that mutual funds have been significantly increasing their exposure to the Energy sector, with both large-cap growth funds and small-cap core funds now overweight energy versus their respective benchmarks.
So far this year the Energy Select Sector SPDR (ETF) XLE 0.76% is up 12.2 percent versus only a 3.5 percent gain for the SPDR S&P 500 ETF Trust SPY 0.14%.
Goldman currently has…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
