Energy Sector; Bullish Breakout Taking Place

Apr. 06, 2017 11:20 AM ETXLE
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Contributor Since 2013

I produce chart pattern analysis to help people capitalize on the excess fear and greed of global investors, regardless of market direction.


My goal: be your "28 second solution" to investment research by helping you save time, improve decision-making and results by employing the "Power of the Pattern"  


You can follow some of my research on my website by signing up for my updates in the right column of the blog. I look forward to an opportunity to learn about your research needs.

Energy stocks have not been a good buy and hold investment for the past few years. Looking back over the past 5-years, XLE has lagged all of the S&P 500 sectors and it is the only S&P sector that has a negative 5-year return. Could this trend be ending? A couple of things have caught our eye of late, from a Power of the Pattern perspective.

This chart looks at the performance of Crude Oil, two energy ETF's and the S&P 500, since 3/27. Not seen this kind of energy strength over the broad market in a good while.


Below looks at the XOP/SPY ratio over the past three years. This chart reflects that XOP has been much weaker than the S&P since 2014.



A year ago this ratio made a low and since then, it is attempting to create a series of higher lows and higher highs. The ratio hit rising channel support of late at (1) and it is now attempting to break above resistance of a bullish falling wedge at (2), which sends a bullish message to this sector.

The Power of the Pattern shared last week that a two-thirds chance of a bullish breakout was in play, see post HERE. A week later, the breakout of the bullish falling wedge is taking place.

Full Disclosure- Premium & Sector/Commodity Members are long this sector.

Not a subscriber to our research products yet? Email us for discount and trial offers to get started



Get our daily research posts delivered to your inbox here

Questions: Email or call us toll free 877-721-7217 international 714-941-9381

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in XLE over the next 72 hours.

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.