Warning: These Stocks Just Flashed a “SELL” Signal


The bullish percent index for the energy sector (BPENER) triggered a sell signal on Monday.

A sell signal occurs when the BPENER rallies into overbought territory – above 80 – and then turns lower.

The red circles on the chart indicate the four sell signals that have occurred over the past two years.

[ad#Google Adsense 336×280-IA]In each of the previous three cases, oil stocks sold off sharply.

The AMEX Oil Index (XOI) dropped anywhere from 11% to 29% sometime over the next five weeks.

It wasn’t always a straight shot lower, of course.

Sometimes, the oil sector chopped around for a few days before the selling pressure finally took hold.

In each case, though, shorting the oil stocks following a BPENER sell signal would have been a profitable trade.

– Jeff Clark


Source: Market Notes