Over the past couple of years, the energy sector has declined a good deal more than it has rallied. Lately, some assets in the sector have been moving up and have been jumping over key resistance levels. So is crude oil following energy stocks and hopping over resistance?
Since July, we have noted that the energy complex looked to be forming several reversal patterns, which appeared to be taking the of a bullish inverse head-and-shoulders formation.
XLE, XOP and OIH at (2) all look to be breaking above neckline resistance. Crude oil is actually lagging the others at (1). A breakout by crude at (1), we feel, would be good for the other three.