Chart of the Day - Monday, October 4th, 2021

Today’s Chart of the Day was shared by Drew Wells (@DrewTheCharts). It's a weekly candlestick chart of the Energy sector ETF, $XLE, over the past seven years. The top-weighted stocks in this ETF include $XOM, $CVX, $SLB, $COP, and $EOG. The Energy sector has been exhibiting some serious relative strength lately. It's the best performing sector year-to-date by a wide margin, and it's the only sector showing a positive return over the past month. Rising Crude Oil prices have undoubtedly been a tailwind for the sector, with Crude hitting a 7-year high today. However, Drew points out that $XLE still needs to clear a solid long-term resistance level around $55-$57. This level has been a major inflection point over the past decade. It acted as crucial support in 2011, 2016, 2018, and 2019, but it finally broke in 2020, and it has been acting as resistance ever since. A break out above $57 would be very positive for Energy bulls. But until then, keep an eye on how price behaves around this potential resistance level.