Energy is set for a big week with a giant conference in Houston including U.S. shale producers and OPEC players.  They’ve been able to play nice.

Energy stocks are showing relative strength today and over the past week.  This is positive, but this is in the face of 3 months of continued relative weakness.

xle rs

Is today a blip within a trend or something more?

Energy ETF XLE is holding old resistance area 71 as support now.  On the latest low, momentum diverged positively.  In the week since then XLE has tried to finish basing out.

xle

The downside selling appears to be getting exhausted as many stocks are just basing at support.  There does appear to be some opportunity for longs.

It makes sense to keep a tight leash on new positions though as the group has been such a laggard for so long.