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Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

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Time to Sit Back and Plan Your Next Investment strategy

With crude oil and crude oil-related stocks exhibiting nearly free-fall characteristics, unless you’re willing to play the short-side after an almost three month sell-off, this week it may be best to sit back and plan your next investment strategy while waiting for the markets to reach strong value areas.

This week’s sell-off in crude oil and energy stocks was strong enough to pull the rest of the U.S. stock market down. This is a sign that money managers are beginning to sit up and take notice. Investment managers may have been complacent throughout the year because the liquidity provided by the Fed made equities the best game in town.

Stable and up trending crude oil prices may have also been looked upon as signs of an improving economy. Even the early break from the high in June may have been perceived as good news because many economists and analysts may have read this weakness as good for the economy because it led to lower gasoline prices which is beneficial to the consumer.

With nearby crude oil trading at 50% of its two-year range and a few of the oil-related stocks rapidly approaching 50% of their 2014 range, now may be the time to start planning a strategy to take advantage of stock prices that may be trading in a value zone at the same time crude oil reaches a bottom.

 

Since these oil stocks are highly correlated with the price of a barrel of crude oil, there is a strong chance that a turn in the price of crude oil…




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