Production Squeeze:

The XOP is the more broad and diverse ETF covering the exploration and production names. Taking a look at the chart below one can see the tug of war at the round 30 number appears to be a win for the bulls thus far. All four of the previous week traded below 30 intraweek, but none of them CLOSED beneath it. It did record a bullish harami cross last Friday, and notice how support is being found at the middle band of the Bollinger Bands, something it has not done since last October. Advantage bulls. The “squeeze” is on and expect a large move. 

The Tale of Two Whales:

The XLE is very top heavy, like many ETFs, and is why those looking for more equal representation should focus on the XOP. Below we zoom in on two of the biggest names in the energy space, and one is acting much better than the other. CVX happens to be just 9% off most recent 52 week highs, while XOM trades 16% off its. Chevron is holding its earnings related gains much better than Exxon, and CVX is now above both its 50 and 200 day SMAs. It has been energized since kissing the very round par number on 12/26/18.


As some domestic energy names begin to percolate higher, a few select international energy names have been behaving better. Below is the chart of PBR and how it appeared in our 1/8 Energy Report. At just 4% off most recent 52 week highs it is acting much better than regional peers such as YPF and EC, which both still linger 32 and 33% off their respective 52 week highs. If the stock can climb above a double top near 17 made last May and November it should be pulled toward the very round 20 number. 

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