OTCPK:VREYD - Post by User
Post by
fireintheholeon Apr 02, 2007 10:06pm
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Post# 12535317
BCA on Energy Stocks....
BCA on Energy Stocks....Firm Crude Prices May Boost Energy Stocks
Resilient oil prices should provide the catalyst to kick-start the next upleg in energy stocks.
Oil prices have remained remarkably firm over the past few weeks despite declining growth expectations and increased market volatility. Recent price action suggests that, after dropping 35% from its July 2006 high, oil prices may have completed their corrective phase. While a slowing U.S. economy remains a risk, strong Chinese demand should help maintain the floor under crude prices as we have previously noted. If so, investor confidence in this commodity should begin to restore as global growth concerns ease, providing the catalyst to trigger another rally in energy plays. Global energy stocks have trailed well behind earnings growth in recent months, leaving valuations extremely attractive. Moreover, after consolidating for almost a year, the energy sector does not exhibit the overbought properties of most other markets. Bottom line: Stay overweight energy stocks.