Energy Stocks Are Nearing Important Directional Change

As the stock market attempts to rally, some sectors are playing along (leading) and some are not (lagging).

But if the rally is to continue, we should see more sectors join in with bullish formations and breakouts.

Today we look at one such sector: The Energy Sector (XLE).

XLE has been in a down-trend since mid-April. And a breakout may very well signal the next leg higher for Energy stocks (which may also signal a healthier stock market).

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$XLE Energy Sector ETF Chart

This is a pretty simple setup. XLE has formed a bullish “flag” pattern. It’s getting stretched a bit more than I’d like to see, so probably best to see a breakout soon (before it gets too heavy and loses the “flag”).

xle energy sector etf breakout test chart may 7 2024

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.