This morning Goldman Sachs ($GS) and Morgan Stanley ($MS) increased their oil price forecasts by more than 20 percent, signaling a bullish outlook for commodities. According to Bloomberg, $GS boosted its 12- month prediction for Brent Crude to $130 a barrel from $107. $MS raised its Brent estimate by 20 percent to average $120 a barrel this year and by 24 percent to $130 in 2012.
I want to see how these names are doing versus their Defensive Counterparts like Healthcare, Consumer Staples, and Utilities. First, let’s start out by looking at the Energy Sector ($XLE) vs the S&P500 ($SPY). Call me crazy, but this appears to me like a typical correction back to the 200 day Moving Average and a resumption of the rally:
![5-24-11 XLE v SPY 9 mo](https://allstarcharts.com/wp-content/uploads/2011/05/5-24-11-XLE-v-SPY-9-mo1.jpg)
After seeing how good Energy looks vs the rest of the market I’m wondering if there is similar action in Energy against some of the more defensive sectors ($XLV, $XLP, $XLU):
![5-24-11 XLE v XLV 9 mo](https://allstarcharts.com/wp-content/uploads/2011/05/5-24-11-XLE-v-XLV-9-mo.jpg)
![5-24-11 XLE v XLP 9 mo](https://allstarcharts.com/wp-content/uploads/2011/05/5-24-11-XLE-v-XLP-9-mo.jpg)
![5-24-11 XLE v XLU 9 mo](https://allstarcharts.com/wp-content/uploads/2011/05/5-24-11-XLE-v-XLU-9-mo.jpg)
The answer is YES.
Source:
Goldman and Morgan Stanley Bullish on Commodities Boosting Oil Profits 20 (Bloomberg)