Is it too late to buy into oil stocks?
I have been waiting over the past few months for an opportunity to invest further in oil stocks - possibly an oilservice ETF, or a Canadian trust (e.g. PennWest). However I seem to be waiting for a correction that never comes and have missed out on some large gains. With a long term view I think there is still money to be made in this space, but I can't help but think that at this point there is more downside than upside. But then I have been thinking that for the past 6 months!
Is it time to just bite the bullet and buy in, accepting the fact that there may be a short term correction but realising that the long-long-term bull market is intact?
Best Answer
4085 points
EthanR answered one year ago …
Moresby, if you believe that the overall trend for oil stocks is up, but are afraid to wait for a further correction, then your best bet is to dollar cost average in over the next 3-4 months. Short term right now, to me it looks like oil stocks and ETF's (DIG, OIH) are correcting. But one thing you will notice if you look at the RSI for these ETF's is that when it corrects, the RSI usually only goes as low as 50, which shows a lot of relative strength. The last RSI correction to 30 was in February. That was a great time to buy. So perhaps you can use the RSI as a gauge of when to dollar cost average.
Read more from EthanR great answerAnswers
3963 points
MNSL answered one year ago …
It is not too early to start investing in oil stock as long as you see further upside in oil stocks. I think most oil companies are expensive now. Some oil companies already have becomes ten baggers through out the world
Only option that left now is to consider picks and shovels strategy. During gold rush some investors made more profit by applying this method.
I do not think anybody can predict correctly coming correction or end of bull market. These types of things come suddenly and unexpectedly. History has proved many times. If anything goes up it has to go down. Similarly reverse will occur when prices come down.
I found interesting article about oil. So sometimes there is a possibility that even we can see bear market in oil. Pl see following link:
http://seekingalpha.com/article/78798-crude-oil-prices-bears-will-soon-win -out?source=d_email
Next 12 months is very crucial for commodity market according to well informed industrial experts. I personally believe there will be strong correction in the commodity market very soon.
