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A LONGER-TERM TREND REVERSAL IS UNDERWAY IN ENERGY

The SPDR Oil & Gas Exploration & Production ETF, XOP, is one of of top longer-term ideas here. XOP recently reclaimed it’s 40-week moving average, after spending 25 months below, a key long-term trend signal. XOP also broke out to a 5-month high recently and tested the key $60 level. After this recent 10% pullback this week, we believe that XOP is setting up for another leg higher. The 20, 50 and 100-day moving averages have all turned up and the 200-day MA is starting to flatten out.

Sector rotation can be sharp, and pullbacks can happen at any time, but as long as XOP stays over $50, we believe it offers very high potential reward vs risk here.

DISCLOSURES: I am currently long XOP and it went onto the Blue Chip Daily Buy List on 11/17/20.