Energy sector is showing signs of trend exhaustion and high probabilities are there that trend reversal could be in progress. Nifty Energy delivered a YTD performance of 34.26% and 1 Year performance of 41.10%.
Declining oil prices are likely to put pressure on the energy sector. Recent plunge in the international Crude Oil & Natural gas prices could hamper the performance of the sector and could possibly under-perform the underlying index in the near future.
Currently there is a clear divergence between the Energy Sector and the underlying commodities we are expecting the divergence to narrow down in the very short run and that could result in 5-7% correction in the Nifty Energy sector. And Probably a right time to hedge your energy stocks in case if you are a investor in Energy related stocks.