Some equity-based energy exchange traded funds have been somewhat choppy in recent weeks. Others have looked pretty solid.

Put the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) in the latter category. The $871 million XOP is up 2.1% over the past month while the Energy Select Sector SPDR (NYSEArca: XLE) is up less than 1% over the same time. XOP’s recent price action now has the ETF knocking on the door of what could be an impressive move to the upside.

“XOP has been in base mode since topping out last October. Since ‘undercutting’ the prior swing low and finding support at the 200-day moving average in February, XOP has been acting well and is now forming the handle portion of a bullish cup and handle pattern, which is usually a short-term consolidation or pause just below the highs of a base,” said Deron Wagner of Morpheus Trading Group.

That bullish technical view of XOP jibes with those of some other technicians who have recently highlighted improving relative strength in ETF. Add to that, the energy sector is in the midst of its period of seasonal strength. Over the past 20 years, the sector has risen 70% of the time in March and 75% in April. [An Oil ETF With Big Upside Potential]

XOP is an equal weight ETF and, in a departure from cap-weighted equivalents, Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) are not among XOP’s top-10 holdings. In fact, integrated oil stocks represent just 5% of the ETF’s weight and that’s important because the aforementioned seasonality is most efficacious to exploration and production and oil services names. [Must-Buy Energy ETFs]

XOP’s “handle, for the most part, is holding above the rising 20-day EMA, with one dip below which found support at the now rising 50-day MA. The moving averages are now in order, with the 20-day EMA above the 50-day MA, and all three moving averages (20,50,200) trending in the same direction,” according to Wagner.

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