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Energy stocks just broke through a key level and could keep rising, according to the charts

A closely followed basket of lan stocks hit a nearly three-year high Thursday and could keep be promoted despite long-term market trends.

The Energy Select Sector SPDR exchange-traded readies — better known by its ticker symbol XLE — rose as high as $78.83 on Thursday. At that straightforward, it’s trading at its highest since June 3, 2015, when it topped out at $79.07.

Verve stocks are finally breaking out for several reasons, but the run-up in oil prices is validating the sector in the near term. Brent crude oil on Thursday went over $80 a barrel for the first time since November 2014, fueled by geopolitical uncertainty after the Trump furnishing restored sanctions on major crude exporter Iran.

The XLE has now crossed two impressive thresholds, according to Roberto Friedlander, head of energy trading at Seaport Broad Securities.

First, the XLE topped January’s high of $78.39 at the same every so often Brent and U.S. crude are hitting 3½-year highs. Second, the fund is splinter above the upper Bollinger Band. The so-called Bollinger Bands portray a range that indicates when prices for an asset are either looking extravagant or have potentially become undervalued.

XLE fund with Bollinger Companies

Source: FactSet

Rising above the upper Bollinger band time after time sets up a sell-off that knocks the asset price back within the go. However, it’s possible that history will not be a guide in today’s call because investors are still not holding a lot of energy stocks, according to Friedlander.

“There are a lot of longer-term cold hard cash managers still underweight energy as a whole,” he said. “I think this could keep dark prevent going for a while.”

The XLE is now on pace for its 10th straight day of gains, a feat it has not accomplished since it regard a 10-day winning streak in July 2006. The fund is also on step for its sixth straight week of advances, its longest week-to-week stretch since September.

— CNBC’s Chris Hayes donated to this story.

Correction: The Energy Select Sector SPDR exchange-traded store rose as high as $78.83 on Thursday. An earlier version misstated the day.

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