Has The Energy Run Exhausted Itself?

I often say trends in motion tend to stay that way, to the upside or downside, more likely than they are to reverse. Speaking of that energy must be given credit until it is undeserved. The group has had a tremendous run and is in need of a warranted breather. In 2021 it had the most dominant run for a major S&P sector rising 54.6%, the best annual move by any group dating back to technology up almost 62% in 2009. We know with markets, as in life, all good things must come to an end but do not count out the space just yet. Sure last week the XLE was the worst actor down 8%, and pullbacks among leading groups should be done in not such a volatile fashion. Earnings are coming in hot and heavy this week and energy is no exception, and HES is holding the very round par number after a quick 15% haircut. RRC is maintaining altitude above its rising 50-day SMA, something that is rare for any group currently. DRQ is it can hold the round 30 number, in a 30-40 range it has been trading in recently can be attractive. I am not saying to do anything with these aforementioned names but their reactions should be telling for energy as we head into the middle of 2022.

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