Are energy stocks bullish? Some analysts are getting bullish now, right at a time when the price of crude oil is rising. Admittedly, both crude and energy stocks have been in great shape since June. However, both are bumping into heavy resistance now. Moreover, the U.S. dollar seems to be stopped falling.

Before looking in the details we want to point out that crude oil is an extremely volatile asset, it is very hard to forecast certainly short to medium term.

The chart of energy stocks makes the point we made above. Already many months ago we identified th 69 to 70 area in the XLE ETF as key resistance. That is where both trendlines (in purple) come together, see the red circle on the chart.

Crude oil is also running into heavy resistance on its chart. The crude oil chart closed right below $52 today, which is right at a 900 pound resistance area.

As said, the U.S. dollar seems to be stabilizing at this price point. No wonder crude and some other select commodities did well in recent months. Serious weakness in the dollar was without any doubt an important trigger. Now that the dollar is stabilizing the million dollar question is whether commodities will continue to do well. If yes, it could indicate strength in commodities as an asset class. If no, investors need to stay away from commodities in the short to medium term.

For now, crude oil and energy stocks are neutral, until they show their ability to break through heavy resistance.

(Click on image to enlarge)