Commencing in early February major key mining and oil stocks generated technical buy signals. The fact that this occurred in a "cluster" was positive and significant for the resource / energy sector outlook from a technical perspective, as it is a positive momentum indicator when key stocks in a sector generate buy signals in rapid succession. QMG clients were alerted in early February of the turnaround that was occurring in those sectors of the market. Although the oil price has not yet generated a technical buy signal, it is often the case that the stock technicals lead the related commodity price i.e stock buy signals are generated prior to the related commodity price turning positive. This is the current experience with the oil stocks/price. Brent crude is being watched closely as it has now has the potential to generate a buy signal.
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