“Super trader” Jeff Clark says oil stocks are oversold right now. Writing in today’s Growth Stock Wire, Jeff says the bullish percent indicator for the oil sector, BPENER (below), is flashing a buy signal for oil stocks.

This from Jeff:

BPENER is a momentum-based indicator that generates buy and sell signals based on oversold and overbought conditions. The oil sector is overbought when BPENER rallies above 70 and then turns lower. The four most recent sell signals are marked with red circles. Each signal was profitable for anyone taking a short position on the oil sector.The oil sector is oversold whenever BPENER drops below 20. It generates a buy signal (the blue circles) when it turns higher from oversold levels. The last time we got a buy signal from this indicator, back in March, my Advanced Income subscribers took on three trades. Each of them generated at least a 25% return in just one week.

We are facing similar oversold conditions today.

Ideally, I’d prefer BPENER to drop below 10 before turning higher and giving us a buy signal. But as you can see from the rising gray trendline on the chart, last week’s reading of 13.64 may be as close as we get.