Energy exchange traded funds have rallied over the past month as oil prices grind their way back to $100 a barrel and the sector ETFs extend their market lead.
Energy Select Sector SPDR Fund (NYSEArca: XLE) is up 8.2% over the past month, compared with a 3.9% gain for the S&P 500. Year to date, the energy ETF has climbed 17% while the broader market has advanced 8%, according to Morningstar.
Energy ETF holding Chevron (NYSE: CVX) is up more than 20% so far in 2011. The rally in the top Dow component is one reason why the index is outperforming the S&P 500 this year. [Why Dow Industrial ETFs are Beating the S&P 500 This Year]
The energy ETF “is outperforming today with the point and figure (P&F) price chart nearing a spread triple-top breakout, a move which would notch a new 2011 high. Beyond that we would look for a test of the 2008 high, also the all-time high, at $91.42 a share,” according to the Coe Report, a newsletter from Investors Intelligence.
“Just as compelling is the P&F relative chart for XLE versus the S&P 500. That ratio exhibits a ‘W’ bottom, effectively a base which implies a relative move to the 2008 high, equating to further outperformance in the months ahead,” the newsletter said Friday.
Energy ETFs have been a sector leader over the past two weeks, according to StockCharts.
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.