Could It Be Possible?

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If I were to look at the chart below with no idea what it represented, I would call it a very strong buy. It has a long, well-formed base. It has surging volume in all the right places. It had an enormous breakout and a successful retracement without violating its breakout. Basically, it has everything you’d want to see when you bought a financial instrument.

slopechart ERY

The curious thing is that this is ERY, the triple-bearish-on-energy fund. What most people would assume it “should” do now is fall to pieces, as the recovery takes hold. As a chartist, however, I wanted to say it sure looked like a strong buy to me.

Adjunct to this, I wanted to note the oil and gas index ($XOI) seems “trapped” beneath its lows of the financial crisis. I say again, it seems nearly impossible to me that energy companies would just sink farther from the depths they’ve already reached, but……… for thought.

slopechart XOI