Energy stocks lead as price of oil bounces from trendline support. Real Time Economic Calendar provided by Investing.com. **NEW** As part of the ongoing process to offer new and up-to-date information regarding seasonal and technical investing, we are adding a section to the daily reports that details the stocks that are entering their period of seasonal strength, based on average historical start dates. Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends. Stocks Entering Period of Seasonal Strength Today: Flextronics International Ltd. (NASDAQ:FLEX) Seasonal Chart The Markets Stocks closed marginally higher on Wednesday, led by the energy sector, as the price of oil rebounded following a number of weeks of selling pressure. The move comes as the EIA released its latest petroleum status report, which showed favourable conditions for product inventories. The weekly report indicated that oil inventories grew by 900,000 barrels while gasoline inventories fell by 3.7 million. The result saw the days of supply of oil fall by three-tenths to 33.9, coming off of the all-time high at 34.2, while gasoline days of supply dropped by another full day to 25.7. The days of supply of the refined product now sits below its seasonal average, the first such occurrence since last June. The increase in the product supplied of the refined product, a gauge of demand, continues to outpace production, a favourable backdrop to continue to draw on gasoline inventories and eventually oil inventories when refiners conclude their annual maintenance period. While the demand side looks solid, analysts might take note of the ongoing increase in the domestic production of oil, which is keeping the pace of inventory gains elevated above the average trend. The days of supply of oil typically hits a peak around the end of March, preceding the peak in the level of inventories, which is typically realized around the beginning of May. The price of oil posted solid gains following the report, bouncing firmly from trendline support that has spanned the past year. Minor resistance is apparent around $49.50 with a more significant level of resistance at $52. Seasonally the price of oil moves higher between February and May. And with the commodity trading higher, producers are realizing a reprieve from the selling pressures that have dominated the year-to-date trend. The S&P 500 Energy sector index is reaching back towards the upper limit of the declining trend channel that currently peaks around 515. In Canada, the S&P/TSX Capped Energy Index, which has more exposure to natural gas, broke above a triangle pattern, clearing key hurdles at 50 and 200-day moving averages. Momentum indicators on the Canadian benchmark have been positively diverging from price for the past month and a half, suggesting waning selling pressures in recent weeks. The sector remains in a period of seasonal strength through to the start of May. ENERGY Relative to the S&P 500 One of the things we have been highlighting over recent months is the pickup in shipping activity, a positive for the global economy. But while shipping volumes were rebounding nicely, expenditures had been lagging. Economic theory suggests that volume leads price and this has become evident in the latest read from CASS Information Systems with respect to their freight indexes. Expenditures through the first two months of the year are higher by 4.8%, much better than the negative change that is average through the end of February. This is the best two month start to the year since 2011 as the economy started to reignite following the great recession. Shipments, meanwhile, are hugging the flatline on the year, around 2% below average for this timeframe. This follows an above average change reported for the 2016 calendar year. The increase in shipping expenditures is also being picked up on the Baltic Dry Index, which is testing the highest level in almost two and a half years. The gauge of the price of moving major raw materials by sea declined in January, retracing back to previous resistance, now support, at the upper limit of the declining trend channel that had spanned the past three years. Now, the index is breaking above what could be argued as the neckline to a reverse head-and-shoulders pattern, which, if fulfilled, could see a return of prices back to the highs set in 2013. Seasonally, the Baltic Dry Index typically flat-lines, on average, between now and August. Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.83. Seasonal charts of companies reporting earnings today: S&P 500 Index TSE Composite