XLE: This Is Not The Time To Be Buying Aggressively (Technical Analysis)


  • The energy ETF has outperformed the market since our last update in July. While we had expected a near-term bottom, we didn't expect the outperformance.
  • WTI crude remains close to its February lows but has seen robust buying support. Therefore, a short-term rally is expected, which could further lift sentiments in the XLE.
  • However, we posit red flags in natural gas price action are warranted, given its rapid surge. Therefore, the bifurcation seen could complicate the analysis moving forward.
  • Therefore, we encourage investors to bide their time and wait for a successful re-test of the XLE's July lows before adding exposure.
  • As such, we reiterate our Hold rating for now.
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Rise in gasoline prices concept with double exposure of digital screen with financial chart graphs and oil pumps on a field.



The Energy Select Sector SPDR ETF (NYSEARCA:XLE) has outperformed the SPDR S&P 500 ETF (SPY) since we last updated in July. We had expected the XLE to form a near-term bottom in July as it nearly

XLE price chart (weekly)

XLE price chart (weekly) (TradingView)

WTI crude oil futures price chart (weekly)

WTI crude oil futures price chart (weekly) (TradingView)

Natural gas futures price chart (weekly)

Natural gas futures price chart (weekly) (TradingView)

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