The energy sector’s 2017 tale of despair is well-known. For example, the Energy Select Sector SPDR (NYSEArca: XLE), the largest exchange traded fund dedicated to energy equities, is down nearly 14% year-to-date and the sector’s price action has recently little in the way of encouraging signs.
Some of the struggles of oil and the energy sector this year can be pinned on investors’ concerns regarding the ability of major oil-producing nations, including the Organization of Petroleum Exporting Countries (OPEC), to effectively reduce production. However, some sell side analysts are surprisingly bullish on the sector.
“Energy stocks will likely continue underperforming rising equities elsewhere in the market. Interestingly enough, the technology sector’s performance relative to the energy sector (on opposite ends of analysts’ buy rating spectrum) is currently breaking through 15-year resistance as technology continues to outperform,” reports CNBC, citing Oppenheimer’s head of technical analysis, Ari Wald.
However, investors will not find attractive valuations on lagging energy stocks. At least not at the moment.