‘Beaten-Up’ Energy ETFs Look to Recover with Oil Prices

June 27th at 4:03pm by John Spence

The largest energy sector ETF jumped more than 2% on Wednesday as the fund tries to recover after falling to the lowest levels since October 2011 on plunging oil prices.

The $6.1 billion Energy Select Sector SPDR (NYSEArca: XLE) was up 2.2% late Wednesday as crude oil prices climbed back above $80 a barrel.

Technical analyst Tarquin Coe at Investors Intelligence said the energy ETF was outperforming the market Wednesday as it attempts to bounce from support at the June 4 low. [Jim Rogers: Commodity ETFs to Rise on Supply Shortages]

On-balance volume and relative strength indicators are “showing slight bullish divergence with the recent test of the June price low,” he said in a newsletter.

“A double-bottom may be forming and that would be confirmed on a break above the neckline at $66.50 [a share],” Coe wrote. “Clearing that level would also break the four month downtrend. The sector is beaten up and a recovery is overdue.”

XLE was down about 14% for the trailing three months heading into Wednesday’s trade. [Oil ETF Falls 30% from 2012 High]

Energy Select Sector SPDR


The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Tickers

XLE