Today’s ETF chart of the day again comes from Investors Intelligence analyst Tarquin Coe, who takes a look at the recent outperformance of the energy sector as oil prices rise.
“The relative rally for the SPDR Energy ETF (XLE) versus the S&P 500 remains firm.
We looked at this chart a week ago and the story has not changed. We continue to view near-term weakness in the sector as a buying opportunity. A small relative reaction is underway but that is healthy and nothing untoward given last month’s strength.
The September relative high is still key to direction in the months ahead. That point marks the neckline of a cup-and-handle pattern.
Breaking up through that fulcrum would activate the base. Doing so would almost guarantee outperformance by energy into the early summer.”
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.