The Energy sector is perched right at support that will be key to it’s forward prospects. Let’s look at daily and weekly charts.
XLE (Energy sector ETF) is starting to bend its daily moving averages down and that needs to be remedied soon in order for the sector to remain at least moderately constructive or resume its previous bullish trend.
The noted lateral support (green dashed) is actually a longer-term parameter to lateral support in the 86 to 88 range. Previous overbought signals have been worn off as RSI slithers sideways (but positive) and MACD has eased for the better part of a year.
Bottom line is that if you are a fundamental Energy bull, you’ll want to be at attention here because, again assuming fundamental bullishness, this is a buying opportunity. As for the technicals, a tight stop loss to the bull view would be below 86 and a much more lenient one would be below 82.40.
Personally, I am still holding CVX, recently added XOM and am keeping an eye on XLE. But if my favored 2025 view of an interim deflation scare and economic contraction plays out, Energy would likely be adversely affected, Trump or no Trump. So it’s just a lower priority TA view for any Energy bugs interested.
