Energy Sector (XLE): Will “Long” Moving Averages Hold Again?

Energy stocks have remained strong as crude oil prices remain elevated.

But the Energy Sector ETF (XLE) has traded sideways this year and finds itself trading into a common support/resistance area: the longer-dated 200-day moving average and 40-week moving average.

Today’s charts are more of an educational display of why moving averages matter. And perhaps they matter more to different sectors / assets. Either way, today we focus on why current trading could be important and how these longer-dated moving averages have served as trend support, and a few times as trend breakdowns.

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$XLE Energy Sector ETF “daily” Chart (200-day moving average)

Here we can see that XLE is testing its 200-day moving average. See prior few times (circled). My concern here is that the 20-day is turning down and the 50-day is flattening. This means a reversal would need to be sharp to overcome the loss in momentum. Keep an eye on this.

xle energy sector etf trading moving average support chart october

$XLE Energy Sector ETF “weekly” Chart (40-week moving average)

Here the Energy Sector (XLE) is testing the 40-week moving average. We can see that this area has been a major support during the bull run. So if bulls are gonna step up, it should be now.

xle energy sector etf 40 week moving average support chart history

Twitter: @andrewnyquist

The author may have a position in mentioned securities 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.