In the November 19th edition of the Daily Stock Report, Cheniere Energy Inc. (LNG) and the rising natural gas prices as winter approached were discussed. At that time, natural gas futures were priced at $2.98, up 8.59% for the week and 31.29% for the month, with an 18.66% YTD gain. Since then, prices have continued to climb, reaching a YTD increase of 34.57% by December 27th. By mid-day December 30th, prices spiked another 15%, reaching $3.88 after pulling back from an early high of $3.95. This surge was potentially driven by news of a massive cold front pushing deep into the U.S., increasing demand on the grid, with similar forecasts affecting much of Europe. For rules-based SIA practitioners focused on high relative strength, options for energy exposure remain limited, as the sector is still classified as "Unfavored" by the SIA platform, with many stocks technically weak. In the past, Cheniere Energy (LNG) and Baker Hughes (BKR) were highlighted for their strong SIA scores. Today, TechnipFMC PLC is highlightedâa global oil and gas company headquartered in the UK with French-American roots. Specializing in subsea, onshore/offshore, and surface technologies, TechnipFMC was formed in 2017 through the merger of FMC Technologies Inc. and Technip SA. With a market cap of $9.8 billion, TechnipFMC is listed on the NYSE under the symbol FTI. To begin a relative strength review, the first table clips only the top portion of the SIA Energy Sector Report, featuring names that have emerged as technical leaders. Targa Resources, for example, is in the top position, up 108% YTD, with many other LPs also rising over 50% in the same period. Positioned at number 6 is FTI, with an SMAX score of 8 out of a possible 10, reflecting a YTD performance of 45.30% and outperformance relative to other asset classes. The second chart includes a weekly candlestick chart of FTI shares, showing a consistent uptrend over the past few years, even as the broader sector lagged. Support is visible along the terminus of this positive green trend line at the $27 level, with further support at the $29 level, while resistance is found at the recent high of $32.
For more detailed analysis, the point-and-figure chart, scaled at 5%, offers a long-term view of trading extending back to 2002. This chart shows remaining resistance clustered between the 2010-2015 period, with the first resistance line at $34.55 and the top resistance line at $48.62. Initial support is seen at the 3-box reversal level of $25.78, with additional support at $23.39, truncating a light green zone extending back to 2007. In the middle of the chart, the list of various SIA reports shows FTI positioned in the SIA Favored zone across all six reports. While it may still be early for a broad-based energy boom, there are glimmers of hope, particularly with the surge in natural gas prices. However, technical improvements are still needed across the broader sector. These reports could assist SIA practitioners in identifying top relative strength performers in the early stages, should they seek energy exposure for their client portfolios.
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