×
S&P 500   3,766.47 (-1.54%)
DOW   30,524.65 (-1.84%)
QQQ   279.70 (-0.86%)
AAPL   138.51 (-0.30%)
MSFT   256.63 (-1.14%)
META   162.05 (+1.26%)
GOOGL   2,176.15 (+0.06%)
AMZN   110.68 (+1.02%)
TSLA   663.74 (-2.65%)
NVDA   145.02 (-0.14%)
NIO   21.24 (-0.56%)
BABA   114.53 (-1.27%)
AMD   73.17 (-0.68%)
MU   54.41 (+1.42%)
CGC   2.65 (-5.69%)
T   20.85 (-2.16%)
GE   60.85 (-4.23%)
F   10.82 (-4.42%)
DIS   94.23 (-1.99%)
AMC   12.74 (-5.84%)
PFE   50.58 (-3.31%)
PYPL   71.64 (+0.34%)
NFLX   178.41 (-0.86%)
S&P 500   3,766.47 (-1.54%)
DOW   30,524.65 (-1.84%)
QQQ   279.70 (-0.86%)
AAPL   138.51 (-0.30%)
MSFT   256.63 (-1.14%)
META   162.05 (+1.26%)
GOOGL   2,176.15 (+0.06%)
AMZN   110.68 (+1.02%)
TSLA   663.74 (-2.65%)
NVDA   145.02 (-0.14%)
NIO   21.24 (-0.56%)
BABA   114.53 (-1.27%)
AMD   73.17 (-0.68%)
MU   54.41 (+1.42%)
CGC   2.65 (-5.69%)
T   20.85 (-2.16%)
GE   60.85 (-4.23%)
F   10.82 (-4.42%)
DIS   94.23 (-1.99%)
AMC   12.74 (-5.84%)
PFE   50.58 (-3.31%)
PYPL   71.64 (+0.34%)
NFLX   178.41 (-0.86%)
S&P 500   3,766.47 (-1.54%)
DOW   30,524.65 (-1.84%)
QQQ   279.70 (-0.86%)
AAPL   138.51 (-0.30%)
MSFT   256.63 (-1.14%)
META   162.05 (+1.26%)
GOOGL   2,176.15 (+0.06%)
AMZN   110.68 (+1.02%)
TSLA   663.74 (-2.65%)
NVDA   145.02 (-0.14%)
NIO   21.24 (-0.56%)
BABA   114.53 (-1.27%)
AMD   73.17 (-0.68%)
MU   54.41 (+1.42%)
CGC   2.65 (-5.69%)
T   20.85 (-2.16%)
GE   60.85 (-4.23%)
F   10.82 (-4.42%)
DIS   94.23 (-1.99%)
AMC   12.74 (-5.84%)
PFE   50.58 (-3.31%)
PYPL   71.64 (+0.34%)
NFLX   178.41 (-0.86%)
S&P 500   3,766.47 (-1.54%)
DOW   30,524.65 (-1.84%)
QQQ   279.70 (-0.86%)
AAPL   138.51 (-0.30%)
MSFT   256.63 (-1.14%)
META   162.05 (+1.26%)
GOOGL   2,176.15 (+0.06%)
AMZN   110.68 (+1.02%)
TSLA   663.74 (-2.65%)
NVDA   145.02 (-0.14%)
NIO   21.24 (-0.56%)
BABA   114.53 (-1.27%)
AMD   73.17 (-0.68%)
MU   54.41 (+1.42%)
CGC   2.65 (-5.69%)
T   20.85 (-2.16%)
GE   60.85 (-4.23%)
F   10.82 (-4.42%)
DIS   94.23 (-1.99%)
AMC   12.74 (-5.84%)
PFE   50.58 (-3.31%)
PYPL   71.64 (+0.34%)
NFLX   178.41 (-0.86%)

The Energy Sector Will Rebound In 2021

Thursday, December 31, 2020 | Thomas Hughes
The Energy Sector Will Rebound In 2021A Golden Cross In The Energy Sector

The energy sector has been under a lot of pressure in the last few years. What started with a virtually-unfixable oversupply problem soon accelerated into a price catastrophe due to COVID-19. The combined effects of rampant oversupply and rapidly deteriorating demand drove the spot price for oil down 65% to trade at an 18-year low. Ultimately, the problem is, or was rather, with earnings. The outlook for earnings among the world’s oil producers fell more than 100% and was not far off the reality. The S&P 500 Energy Sector (NYSEARCA:XLE) is on track for earnings to fall more than 100% in calendar 2020 but that is where the bad news ends.

The Bull Case For Oil

Now there is a developing bull-story in the oil fields that points to a rebound in 2021. Not only is the price for oil bottoming, but the outlook for prices is positive. The EIA predicts that high-supply and COVID-restricted demand will continue in 2021 but the pressures are in decline. To start, the economic reopening is well underway and will accelerate over the next two quarters. The vaccines are largely to blame for the acceleration, as they become more widespread so to will global economic activity.

At the same time, the EIA expects usage to come in-line with production and begin chipping away at the global inventory. In terms of pricing, the spot price for Brent and WTI is expected to rise from Q4 2020 to Q1 2021 and continue edging higher over the rest of 2021. The average price for Brent is expected to average $6 per barrel more than it did in 2020 or up 14%, and this figure is up by $5 from the prior short-term EIA analysis.


What this means for the oil producers is more volume at a higher price. While the jump in demand and pricing will not offset all of the earnings declines in 2020 it will be a substantial improvement. When it comes to the stock market the number one driver of price action is the outlook for earnings. With the outlook for energy sector earnings positive and on the rise, there is no reason not to expect the Energy stocks won’t rise with it.

 There Is A Golden Crossover In Energy

The Energy Sector started making headlines a week or so ago when the price chart of the XLE Energy Sector ETF threw off a Golden Cross. The Golden Cross is when the 50-day simple moving average crosses over the 200-day moving average from underneath. This signal is a sign of changing trends as it shows short-term bulls taking control of the market and the longer-term investors are letting them. Since then, price action has pulled back somewhat and it may pull back further but the longer-term outlook is very bullish.

The Energy Sector Will Rebound In 2021

A look at the chart of weekly prices shows a clear Double-Bottoming pattern but one that is yet to confirm. The bottoms are noteworthy because the second is higher than the first and shows a rising tide of support at what are extremely low levels. The most recent action has prices just above the 200-day moving average where support can be expected to come back into play. If the $37.50 level confirms as support a move back to $42 will likely follow. If price action continues to fall the next target for support is near $36. In either case, once the Double-Bottom confirms with a new high the odds for a move to the $60 range become very high.

The Energy Sector Will Rebound In 2021

Another Catalyst For Energy Stocks: Dividends And Buybacks

While not all of the oil companies have had to cut or suspend their dividends and buybacks most have. And that is setting up another catalyst for the sector. As revenue and earnings improve over the coming quarters those value-returning actions that investors love so much will come back on the table. When they do the market will come flooding back into the sector.


7 Agricultural Technology Stocks to Buy as Commodity Prices Remain Volatile

Agriculture stocks have a place in every investor's portfolio. The fact is that the byproduct of agriculture literally feeds the world. But for a variety of reasons, supply and/or demand can be disrupted. For example, the weather is often a concern. Farmers are always subject to periods of drought or flooding.

 But the past few years have shown how this sector is not immune from geopolitical concerns. The Covid-19 pandemic affected supply chains on top of seeing demand destruction in key markets. And this year, the world is seeing how interconnected we've become. Russia's war on Ukraine is shutting in a large percentage of the world's wheat supply.

However, with commodity prices soaring in several categories, investors have an opportunity in agriculture technology stocks. These companies run the gamut from companies that provide equipment to those that provide fertilizer, pesticides, and other products and services.

To help investors determine if this opportunity is right for them, we've created this special presentation. We assess the long-term opportunity for seven agricultural technology stocks.



View the "7 Agricultural Technology Stocks to Buy as Commodity Prices Remain Volatile".

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:


Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastIs The Market Near a Bottom, Does it Matter?

Today’s interview is a little different, in that you get a LOT of market perspective from someone who’s been analyzing stocks from the ground up, for more than three decades. In this conversation, Kate chats with Nancy Zambell, the chief analyst for the Cabot Money Club Letter - and Nancy has a really deep and varied background in the financial industry - as she mentions in this interview, she’s been a banker, real estate professional, and a stock market analyst.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.