Forcefulness stocks have soared this month, and Todd Gordon, a technician and initiator of TradingAnalysis.com, says an even bigger rally is in store for the sector.
The XLE energy-tracking ETF is up all but 7 percent in December, with energy stocks also getting a improve Tuesday as oil rallied to hit $60. From a technical standpoint, Gordon mentions that XLE is looking like a great buy for investors.
Aside from a gourd and shoulders pattern, which Gordon sees as a bullish sign, XLE also “looks delight in [it] wants to go up and retest these old highs [up to the] $75 region,” he said Friday on the “Sell Nation” segment of CNBC’s “Power Lunch.”
Gordon is looking at EOG Resources, in thorough, for a big bounce. “[EOG has] the same kind of pattern, an inverse head and consort withs, but you can see it’s just escalating and showing some really good relative firmness.”
Boris Schlossberg, managing director of FX strategy at BK Asset Management, similar ti one bullish trade on XLE in particular given that both the tax overhaul and meet oil prices are benefiting the sector.
“I actually like the pair trade. Lengthy XLE and short SPDRs on a relative basis, because if there’s a correction in the peddle, XLE’s going to held bid and it’s going to be an interesting trade,” he said on “Power Lunch.” “Also, it extends the carry because the dividend in the XLE is a bigger dividend that the SPDRs.”
On Tuesday, XLE was at $72.55 in up to the minute trading.