Don't Ignore This Chart!

Energy Ignites U.S. Equity Rally

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It's no secret that crude oil prices ($WTIC) have been tumbling over the past 18 months, but that has kept tremendous pressure on energy-related shares and the energy ETF (XLE).  Crude oil managed to close back above $31 per barrel with the Dow Jones U.S. Pipelines Index ($DJUSPL) up more than 10%.  That helped the XLE to climb more than 4.0% on today's session.  XLE's gain more than doubled the gains in any other sector with the lone exception being healthcare (XLV), which was buoyed by an oversold biotechnology ($DJUSBT) sector.  Energy's certainly not out of the woods just yet.  In fact, continuing strength in the near-term will present challenges at the 58.00-60.00 resistance zone.  Check out the chart:

The rapidly declining 20 day EMA is currently in that resistance zone at 58.46 and will provide another obstacle for traders on the long side.  Clearing this zone, however, could open up an opportunity for the XLE to touch its 50 day SMA, something it hasn't done since early December.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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