Thirst For Large Caps:

The belief that large-cap names tend to outperform in the latter stages of an uptrend may be taking place in the energy patch. Market participants’ affinity for dividend yields shows this with names like XOM and CVX just 4% from their most recent 52-week highs, while some smaller peers are off in a more decisive way. Overall we can see this with the XLE now trading just 3% off its annual peak while the XOP is 9% from its own. Give credit to both funds for CLOSING near the highs for the WEEKLY range thanks to Friday’s rally, but the theme can be seen as well with the XLE falling 2.6% and the XOP by 5.8% (interestingly the XLE recorded a bearish harami WEEKLY cross candle last week). PRICE action however is omnipotent and the chart below of XOM suggests further upside. It has displayed some shyness near the very round 90 number, although it did CLOSE above the figure on 5/4 and 5/6 before requiring a reset for comfort at the 50-day SMA. A CLOSE above 92 could ignite the next rally in this mammoth. 

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