Energy for Upside - Trading PXD & LNG
The energy sector is trying to make a move with big names reporting this week.
If you have been solely focused on technology stocks and have been watching SPY and QQQ reach all-time highs, you may have missed what is going on with energy.
That is nothing new for energy, it has been the forgotten sector before.
I exited the energy trade in early January when XLE rejected at $86 yet again, and shares did follow that rejection with new recent lows below $80.
Since then we have seen a nice recovery and consolidation period which looks ready to make another move higher.
Notice shares did struggle at $86 again to close last week. No surprise there.
That said, I think we could see the sector breakout and XLE moving above $86 and then well above $86.
There is still risk that we see another rejection and even lower lows. This is why I am waiting for resistance to be broken and retested before getting too bullish.
But I do like this set up.
And two names I like in particular are Pioneer Natural Resources (PXD) and Cheniere Energy (LNG).
PXD has formed a clear reverse head and shoulders pattern while LNG looks ready to breakout of a descending triangle.
I like them both for more upside if key levels are broken.
Let’s get to the trades!
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