A relief rally in crude oil prices has instilled a positive short-term momentum shift behind energy stocks. We expect the rally to persist in the near term, noting WTI crude oil futures have cleared their 50-day moving average, and energy sector benchmarks have positive technical catalysts such as MACD “buy” signals. The Energy Select Sector SPDR (XLE) has cleared short-term resistance from the daily cloud model, denoted by the shaded area on the accompanying chart. The rally reversed XLE’s five-month downtrend and marked a successful test of long-term support from the rising weekly cloud model. The set-up is supportive of short-term upside follow-through for XLE and its largest constituents, like Exxon Mobil (XOM) , which accounts for about 23% of the fund’s weighting. The breakout in XOM could be a boon to the sector longer-term, but this will likely be contingent on whether WTI crude oil can hold up above long-term support in the low $60s/bbl. Final resistance for XLE is approximately $99. XOM has cleared long-term resistance near $120, leaving a major breakout pending confirmation on a second weekly close above that level, likely this Friday. Breakouts tend to generate additional momentum, which would be welcomed by investors, noting that XOM has been range-bound for about two years and the monthly MACD has the potential to flash a ‘buy’ signal this month after having rolled over in mid-2023. The breakout in XOM allows for a technical price objective of $136, based on a measured move projection. Support is defined by the 200-day moving average, near $112, which served as the staging ground for this rally. However, we can revise support to $120 if the breakout is confirmed for a better long-term risk/reward profile. The primary risk to trading energy stocks right now is geopolitical, with global tensions having the potential to affect the price of crude oil. 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