With the financials weighing on US Equities dragging it into 17-month lows , investors are baffled on which sector to invest in. One such sector worth looking into is the Oil & Gas. It is evident that the Oil & Gas Index is still trading near its 8 year highs, clearly out performing the others. Contrary to other sectors which have already fallen into the bear market territory, the Oil & Gas Sector is still in the bull market region just as long as it holds well above its major trend line'.

Last week we saw this sector pulling back from its six-week high of 672.40 still closing well above its 200-day moving average. Further pull back is very possible in the coming weeks to perhaps re-testing the short term support around the 600 point range . A breach of that level will pave the way for another re-test of the medium term support around 537.55. The medium term support can be considered significant as we observe that for the past 7 months demand has increased (evidenced by the up tick in volume) each time price moves toward the 540 level.