The Majors Must Show Up:
When talking about the lagging energy space two names dominate the conversation in CVX and XOM, at least if one judges this via the XLE. The two juggernauts make up well more than 40% of the fund, and they can provide either a head or tailwind to the overall group depending on their direction. At the moment XOM is “leading” the duo, lower by 3% YTD, while CVX is off by 13%. Exxon did have a hiccup after breaking ABOVE a bull flag pivot of 117 on 4/24 (flag pole began at the very round par number), which was shortlived, and that type of action is often a red flag. Below is the chart of CVX which is trading 18% off its most recent 52-week highs (XOM is 11% off its own annual peak) and if this can break ABOVE the current bearish descending triangle through 159 the group can get a lift. From a seasonality perspective the next 3 months, Q3 since 2019, is easily the worst performing with July-September all CLOSING the month lower from where it started, before a strong Q4 to end the year, for both the XLE and XOP.