The Energy sector has been moving higher on our potential breakout list, following this recent consolidation. The ETF (XLE), at +27.84%, is the #2 performing S&P sector year-to-date.
Over the last 6 months, however, XLE is last at -5.83%. Energy is a volatile sector and is still consolidating, but the potential reward vs risk on any upside breakout is favorable here.
The sector is starting to show some positive technical signals, with recent new highs in Continental Resources, (CLR), Enbridge, (ENB), Equinor, (ENQR) and Cheniere Energy, (LNG). The Energy ETF, XLE, has reclaimed the 50-day moving average as well as industry leaders EOG Resources, (EOG), Occidental Petroleum (OXY) and Schlumberger, (SLB), among others.
Our three favorite stock charts in the group here are Devon Energy, (DVN), Continental Resources, (CLR), and EOG Resources, (EOG). DVN is testing 90-highs and 3.6% below a breakout, CLR made a new 52-week high today and EOG is a recovery idea, reclaiming the 50-sma today.
This is a very volatile sector, so I always keep a trend following stop below, but we believe that the potential upside here, if there is any follow through, far outweighs the risk.
The author has a long position in $DVN at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.