While not the only sector with notable action Monday, action under the hood of sector within Oil was bifurcated with the iShares U.S. Oil & Gas Exploration ETF ([IEO]) gaining 62 basis points compared to the almost 5% gain by the iShares U.S. Oil Equipment & Services ETF ([IEZ]).
From a broader sector perspective, Monday’s (1/6) trading session was led by Energy (XLE) when examining the sector SPDR funds lineup, gaining 2.72%. This follows a 2% gain after Friday’s (1/2) trading, marking the best action for the fund since the day after the tariff tantrum in April last year. This rally brought Energy back above Healthcare within the NDW DALI Sector Rankings, continuing an upward trajectory from the doldrums of the rankings and ongoing battle with Healthcare in terms of near-term improvement in relative strength.
While not the only sector with notable action Monday, action under the hood of sector within Oil was bifurcated with the iShares U.S. Oil & Gas Exploration ETF (IEO) gaining 62 basis points compared to the almost 5% gain by the iShares U.S. Oil Equipment & Services ETF (IEZ).
On the default point and figure chart, XLE broke a double top at $47 for a second buy signal and to match the 52-week chart high that dates to January last year. While the fund has seen recent improvements in technical picture with a trend flip back in December, the fund score of 2.86 is still below the acceptable threshold of 3 when considering ETFs and mutual funds. Somewhat similar, IEO witnessed near-term improvement with a reversal back into Xs during Friday’s trading before rallying to $93 following Monday’s action. Unlike XLE though, IEO still maintains a sell signal and a negative trend, leading to the weaker fund score of 2.17, below XLE and peers. Additionally, Tuesday’s (1/6) action brought the chart back into Os.
Where much of the technical strength can be found within the Energy sector is in the Oil Equipment & Services space. IEZ has maintained a positive trend since July 2025 and buy signal since late October. Monday’s action brought about a third buy signal at $22.50 along with a 52-week high, clearing resistance at $22 that had been in place since November 2024. IEZ now maintains a fund score of 4.30, which is higher than the Energy sector’s group average of 3.59 on the Asset Class Group Scores page. While broader Energy exposure may not be considered, a focused approach on the oil equipment & services subsector could be considered by those seeking to capitalize on near-term improvement. Small exposure would be prudent as resistance can still be found in the lower to mid $20s with the September 2023 rally high sitting at $25.50. Initial support lies at $20.50, while additional can be found at $19.75 and $19, the bullish support line.
