Energy ETF Is Pushing Highs

Energy stocks have been consolidating as major companies report earnings. Now they could be back in focus with inflation still rising and the economy reopening.

The most important feature on the SPDR Energy ETF’s chart is price zone around $56. It was a crucial support area in January 2020 before XLE crashed to a generational low. It was also a peak in June, but the fund has remained above it the last five weeks.

Next, prices have shown new support at a higher level around $57. Notice how tests of that line on October 18 and 21 and November 3-4 and 15 were followed by quick bounces.

Third, the consolidation period has compressed Bollinger Bandwidth to the lower end of its range. Is XLE ready to start moving again?

Finally, notice how the 8-day exponential moving average (EMA) has remained above the 21-day EMA. That shows little selling interest during the recent consolidation phase.

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