Conclusion, Investment Implications, Strategy
The SPDR S&P Oil & Gas Equipment & Services ETF (XES) is in the midst of a March 7th minor uptrend amid monthly asset expansion and quarterly relative outperformance versus the benchmark S&P 500. As long as these positive factors remain intact, this sets up a potential opportunity to buy XES and the energy-related assets it represents.
Current Sector & Industry Group Ideas
Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.
Table 1
Click the table to make it larger
This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.
Analysis & Investment Implications
The upper panel of Chart 1 below plots the SPDR S&P Oil & Gas Equipment & Services ETF (XES) daily since October 2023 with its 200-day moving average, a widely-watched major trend proxy. The green highlights point out that XES rose and remained above its 200-day MA on Mar 7th to indicate a major bullish trend change.
Chart 1
The middle panel plots the corresponding total net assets (AUM) invested in XES with their 21-day moving average, the latter to identify the monthly (our Tactical timeframe) trend of expansion or contraction. The green arrow points out that these assets most recently moved above their 21-day MA on Mar 7th to indicate a new trend of monthly expansion.
The lower panel plots a corresponding chart of the daily relative performance between XES and the S&P 500 (SPY) with its 63-day moving average, the latter to identify the quarterly (our Strategic timeframe) trend of relative outperformance or underperformance. The green arrow points out that KIE shifted to a new trend of Strategic relative outperformance versus SPY on Mar 13th.
Together, these metrics suggest an emerging long/overweight opportunity in XES from a price trend, asset flows, and relative performance standpoint.