Right now, as the stock market rally eases a bit in terms of the financial sector, the energy sector is holding gains. A measure of confidence is returning, thanks to remarks from Ben Bernanke regarding his dedication to stimulate the economy. Also helping the energy sector is the expectation that OPEC will soon be cutting production. This means that supply will decline along with demand, and that oil prices are expected to even out a bit. As a result, Big Oil companies are getting a little boost. ExxonMobil (XOM) and Chevron (CVX) posted the top price earnings out the gate Monday morning on combined confidence and OPEC news.
In addition to Big Oil, other energy sector stocks, including First Solar (FSLR) and Suntech (STP) are heading up. This is actually rather common, as rebounding oil prices often also provide a shot in the arm for solar stocks. Also, some alternative energy funds, like the PowerShares WilderHill Clean Energy (PBW) are doing well. With traditional energy prices on the way back up, it is possible that the recent focus on alternative and renewable energy returns. And this could mean more investment — and returns — for the alternative energy sector.
Another helpful item has been the bargain hunting. Many investors are looking for stocks that offer great value. A number of energy sector stocks have dropped quite a bit in recent weeks and offer excellent opportunities to get high quality holdings at more than reasonable prices. You can get more bang for your buck if you — as Warren Buffett suggests — buy now. Just make sure that you are buying solid companies. You want the bargain, not the basement.
Disclosure: I do not invest in XOM or CVX. I do not invest in FSLR. I am considering STP and PBW.