The table below looks at the performance of the major S&P 500 sectors over the past 5 years. One sector stands out… and for the wrong reason.
The Energy Sector ETF (NYSEARCA:XLE) has been a notable laggard (-1.42%). It has lagged the S&P 500 (NYSEARCA:SPY) by nearly 70% over that 5 year period.
So here’s a good question: “Is it time for them to rally?”
S&P 500 Sectors – Performance (past 5 years)
The chart below look at the Energy Sector’s (XLE) performance vs the S&P 500. This ratio shows how deeply the sector has underperformed over the past 17-years. But looking closer at the chart, we can see that it present a nice entry for a counter-move (with a stop below point 2 – support).
Energy Sector (XLE)/S&P 500 Ratio Chart
The long-term trend is still down (lower highs and lower lows and below long-term moving averages). So if one is a trend follower, we doubt that this sector interests you.
However, if one likes to buy beaten down out-of-favor sectors with well-defined stop-loss parameters (and is willing to enforce them), then the energy sector looks interesting here.
Thanks for reading!
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.