“We have been bullish on oil for much of the year, but with the recent rally in oil prices, most of the market is now jumping on board to that idea,” Michael said.
“Does this mean it’s too late to buy an energy stock like Woodside (WDS)?
“Our Woodside target from a few months ago was up near $38.
“After over-extending itself in late July and becoming overbought, WDS then started to consolidate that move.
“It’s interesting to see that the shares were not sold down heavily like on prior occasions. “Instead, they have spent the past several weeks trading sideways.
“So, while oil prices have headed higher the past few weeks, the move higher in Woodside was made before that.
“This consolidation, which is just under the 2022 peak, is potentially a bullish sign as WDS could be preparing for an upside break.
“In other words, despite oil prices now looking overextended, the Woodside share price is not.
“A break above $39 would be the buy signal,” Michael said.
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