From the Desk of Steve Strazza @Sstrazza
Regardless of the time frame, we continue to see leadership and relative strength from energy stocks.
Outside of utilities, it is the only sector flaunting positive returns on a year-to-date basis.
Even over the past several weeks, with the broader market coming under increasing pressure, energy stands out as the most resilient group.
When we look at the structural trend for energy stocks, this makes a lot more sense.
While most sectors and indexes are facing downward sloping or sideways 200-day moving averages, indicating that the path of least resistance is lower, energy stocks remain in a strong primary uptrend.
While the corrective action of the past few days has not left energy unscathed, the Energy Sector SPDR $XLE remains above our risk level of 79.
As long as this is the case, the bias is higher for energy, and we want to be looking for the strongest stocks to buy as a way to express our bullish thesis.
This brings us to today’s post.
We scanned the energy sector for two things:
- Stocks that are exhibiting relative strength versus their peers over multiple timeframes.
- Stocks that are breaking out of structural bases and offering risk/reward profiles skewed heavily in our favor.
We found six names that either just broke out to new all-time highs, or are on the verge of breaking out now.
These stocks are some of our favorite vehicles for betting on a fresh leg higher from the oil & gas industry.
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