Up about 7.50% over the past week, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) is in the midst of a substantial rally and some technical analysts believe the widely followed energy exchange traded fund can continue climbing higher.

Market observers and analysts argue that U.S. energy stocks are in a position to outperform broader equity markets this year, even if oil prices don’t move higher. The energy industry has grown more efficient after cutting costs in response to the plunge in crude oil prices in previous years, so they are now in a better position to improve revenue at lower oil prices.

“From 2010 until 2013 it looks to have created a pennant pattern (series of higher lows and lower highs). Once resistance was taken out, buyers came forward and XOP rallied nearly 30% in the next couple of years,” according to ETF Daily News.

XOP Moves High Above 200-Day Moving Average

XOP’s recent rally has taken the fund more than 14% above its 200-day moving average and nearly 13% above its 50-day line. XOP tracks the S&P Oil & Gas Exploration & Production Select Industry Index.

The equal-weight ETF “seeks to provide exposure the oil and gas exploration and production segment of the S&P TMI, which comprises the following sub-industries: Integrated Oil & Gas, Oil & Gas Exploration & Production, and Oil & Gas Refining & Marketing,” according to State Street SPDR.

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