XLE: Equity-Based Energy ETF Nearing a Breakout

The Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, is up more than 11% year-to-date, making it one of the more impressive performers among the sector SPDR ETFs.

The third quarter is historically unkind to the energy sector, but some industry observers believe the recent pullback in crude prices is not a cause for alarm and that there is still upside available with some of the big-name integrated oil companies held by ETFs like XLE. However, some technicians see XLE as poised to keep delivering.

Related: Why Investors are Bearish on Oil ETFs

With the arrival of the third quarter, an interesting dynamic is at play. Energy stocks historically are slack performers over the next several months while oil is one of the third quarter’s best-performing commodities on a historical basis. Rivals to XLE include the Vanguard Energy ETF (NYSEArca: VDE), iShares U.S. Energy ETF (NYSEArca: IYE) and the Fidelity MSCI Energy Index ETF (NYSEArca: FENY).

“The XLE has now fulfilled the requirement for a breakout trade set up as it has closed above the key $69 pivot after the key date of July 4, following the price extreme on July 1. Time cycles are now signaling higher prices into July 18 and if it continues higher from there, August 9 and possibly even September 8,” according to TradingFloor.com.