2024-04-14 10:07:12 ET
Summary
- Invesco S&P 500 Equal Weight Energy ETF has seen a significant rally in price this year on the back of higher WTI prices.
- The OPEC cartel has kept oil in a tight range for the past two years, but may loosen production cuts now that the top of the range is reached.
- Geopolitical tensions in the Middle East are priced in and selling panic events is more ideal than buying them.
- RSPG exhibits an overbought technical condition, with the fund's RSI reading above 70.
- A protracted conflict in the Middle East represents an upside risk to oil prices, but OPEC has the ability to roll back their March 2024 production cuts.
Thesis
We wrote last August about the exchange traded Invesco S&P 500® Equal Weight Energy ETF (RSPG), touting it as an excellent choice to obtain a cross-sectional exposure to U.S. oil and gas, in an environment where tech was the favorite trade. Our original article highlighted how RSPG was unique in offering equal weight exposure to both large and mid-cap energy equities. The fund is substantially up since our 'Buy' rating:
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Read the full article on Seeking Alpha
For further details see:
RSPG: This Energy Fund No Longer Offers An Attractive Entry Point (Rating Downgrade)