Oil is down. Time to buy Energy Related Companies?

Many investors look for contrarian investment.

What does it mean and why?

Contrarian means buying when majority is selling (that is the stock is expected to be low) and selling when majority is buying (that is the stock is expected to be high).

Why smart investors prefer this approach? Because those who care to look around and ask notice that majority of investors lose money. So, contrarian approach should be doing better: that is the underlying thought.

It is easy to arrive at that conclusion in mind.

It is extremely difficult to put it in practice.

Large number of investors try to catch bottom and fail – because, firstly, they may not have a robust system to recognize “potential bottom” [potential – as an investor could never know for sure unless they were able to totally control that stock/market]. Secondly they may not now a location to buy the stock where Stop Loss is narrow and potential reward is high.

Superior Profit’s CUE System makes these decisions easier. Not exactly a crystal ball. But enough signals to make a confident investment at the right time.

Oil is at very low level. But Oil is still falling – as one may see in the charts (not attached here).

We keep an eye on any instrument that falls so much. Though Superior Profit Investors don’t have a plan to buy Oil right now, there is some encouraging signals in Energy related companies.

One such example is ONGC – one of the largest Oil Exploration and Production companies in India. It is down about 40% in last one year. Today (10th Dec) it is up 1.7%. The At A Glance CUE Charts below shows the rational for potentially taking a long position here.

What would your Investment System tell you on this stock (Thomson Reuters symbol for this stock is ONGC.NS).

More importantly, would your system let you identify such opportunities in minutes (in Superior Profit we use Sonar to identify opportunities). And then let you act on it using unambiguous rule set (we use At A Glance charts for that)?

Being contrarian can be promising. If one can do that effectively.

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