NRG has long had a beautiful relationship wit OIL but recently that correlation has gone straight out the window. Im by no means an economics pundit and frankly am slightly unsure as to how an electric utilities company relates to oil (both energy sector? oil used as a means for producing energy? are a few ideas that could be in the right direction).
They are also both part of the energy sector despite being in completely different classes (commodity vs common stock).
That being said from a chart reading perspective, the divergence is worrying and could be sign for a strong reversal in the NRG bull run because i doubt that the price of oil is influenced by NRG, but rather the price of NRG is reliant on the price of oil.
Short position here on NRG hoping that the correlation between both returns to around 1
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seen here on the weekly is an upper resistance level that is very strong combined with a gigantic upward trading wedge that has been narrowing for years. Upside is extremely limited and this reinforces the short idea
I'm bearish as well. It looks like a massive sell came in Friday. I think it might retest 30.33
CodedFlow
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one concern: if US will boom ... NRG can and should go up.
MysteriousPersian
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@LoLBeach, im 80% sure the US is headed for a recession in the near term
CodedFlow
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@TristanKhanizadeh, i am only 65%. elaborate please.
MysteriousPersian
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@LoLBeach, cannabis bubble, crypto bubble, tech bubble. levels of debt (all kinds) are at never seen before all time highs. housing is nearing the end of its cycle. discrepancy between median household income and the 1% is at all time high (not that im against that) but it shows a concentration of wealth at the top. with that in mind, the top 1% Is not investing but selling rather. Buffet is sitting on a hoard of cash. so is jeff bezos who sold a significant amount of amazon shares this year.
I could go on...
CodedFlow
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@TristanKhanizadeh, you are not wrong. now let's see where the bubble is globally. who can fix it faster. where is the bottom. overall though you are right. i would add: if Asia is a bubble too... then all ships will sink together. and this is the time when everybody seems to call "BS" on everybody. i am with you.
MysteriousPersian
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@LoLBeach, ta market skeptics calling for a big end of year recovery is another red flag for me
CodedFlow
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@TristanKhanizadeh, agreed. there are no coincidences.
CodedFlow
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a true pro
MysteriousPersian
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@LoLBeach, defenetly not, but ill take the compliment :)