Energy ETF Faces a Critical Test

The relative strength breakout from this descending triangle pattern back in Apr. 2014 pointed to a major rotation into this sector, from a longer-term perspective. However, VDE’s relative strength line now sits back on top of its prior breakout level. Failure to maintain this support suggests some kind of false breakout and a move back into this broad sideways movement. This might require an adjustment to my U.S. Sector ETF Portfolio. On the other hand, the ability to maintain support could lead to the next phase of outperformance.

Energy ETF Faces a Critical Test
J. Beck Investment and StockCharts

Best,

Jonathan Beck

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