With the price of crude pulling back recently, Jim Cramer has seen many of the gains from the recent rebound in black gold go right down the drain. That is why he thinks it is important to revisit the oil patch, and find out if the rebound is gone forever.
The "Mad Money" host turned to Robert Moreno, a chartist and colleague of Cramer's at RealMoney.com, who is also the publisher of RightViewTrading.com. Cramer's goal was to get a better read on the two most important subgroups of the oil patch — the large integrated oils, like Exxon Mobil, and the oil service companies, like Schlumberger.
The last time Cramer checked in with Moreno, he made a bold call and said that Exxon was about to bring the entire oil complex higher. His call was right, with Exxon up now more than 10 percent in four weeks.
However, Moreno now sees Exxon coming down from its recent high and thinks investors should reappraise the entire group. So, even though the big oil companies led the energy rally earlier in the month, he now says that they are ready to pause and consolidate.
But that doesn't mean there will be a sell-off in oil. Instead, Moreno predicted a change in leadership. He anticipates that as the big oil companies consolidate, the oil service stocks could be ready to breakout.