“There are more companies basing – consolidating sideways for long periods of time – and rising out of bases in energy than in any other sector”
The Energy Select Sector SPDR (XLE) is widely used to invest in energy stocks, especially in the age of the exchange traded fund (ETF) portfolio. Many technicians will do sector performance analysis using this fund as on the S&P Sector ETF chart at Stockcharts.com (here). The problem with this ETF is that it is capitalization-weighted in which the top two stocks – Exxon and Chevron – represent 30% of the entire fund. The performance of these two stocks has held the sector back, masking the true and stellar performance of energy stocks this summer.
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