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Oil Could "Easily" Hit $90: Energy Key to 2010 Stock Market, Philip Roth Says

Posted Jan 05, 2010 02:31pm EST by Peter Gorenstein in Investing
Related: xle, oil, spy, dia, xlk, xrt, qqqq

Oil truly is "black gold" these days. Oil futures have climbed for nine straight sessions, rallying about 12% in that time.

Phil Roth, chief technical market analyst with Miller Tabak, sees plenty of reasons not to bet against the trend. Examining the charts, he sees "very little resistance over head" and believes momentum could "easily" move oil into to $90-95 per barrel range.

That's obviously good news for commodity traders but not necessarily so for stock investors. As Roth tells Aaron in the accompanying clip, he's "more concerned with what stocks do when oil goes up." Unlike last year, rising oil prices might not be bullish for stocks in 2010. Then it was viewed as a sign of an economic recovery; now, rising energy prices could hamstring consumer spending. "That could be a bearish story," Roth concedes.

So far, Roth is noticing only a "hint" of weakness in consumer sensitive stocks. But, if the sector does "fizzle out," Roth isn't convinced it would be disastrous for the overall stock market.

He believes continued strong performance from energy, basic materials and technology stocks could be enough buoy the market again.

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