Energy Dominates
Gary S. Morrow | Apr 14, 2021 04:23PM ET
The energy sector is back on track today. The top 20 gainers on the S&P 500 Index is dominated by energy. The sector in general has been in pullback mode since peaking in early March. At last week’s lows the Energy Select Sector SPDR® Fund (NYSE:XLE) had dropped 13% from its March highs. Has this healthy pullback run its course?
We are long Exxon Mobil (NYSE:XOM) and have been adding this month. The stock is up more than 3% today and is heading for its best April close. The pullback in XOM held a very solid support zone near the summer highs as well as the 50-day moving average. The stock has also managed to work off its slightly overbought reading (daily MACD) and is now sitting near neutral. We believe XOM is set up well for a fresh rally leg.
On the downside, a close back below the March lows ($54.00) would send a clear warning sign the pullback is not complete.
Note: We are long XOM in some managed accounts.
You can read Gary S. Morrow's original post here.
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