It has been said the S&P 500's ascent to what feels like a
string of never ending new highs has been a rally short on
long on low beta fare
At the sector level, and it is sectors that lead equity
markets not vice versa, there are signs risk is coming back into
Energy is one of the higher beta sectors that has been showing
signs of promise. In the past month, the Energy Select Sector
), the largest energy ETF by assets, has surged 10.3 percent and
is showing signs of a major technical breakout.
Chris Kimble of Kimble Charting Solutions notes XLE just
cleared horizontal resistance and now resides
about 10 percent from its 2008 highs
. Interestingly, Tuesday's for NYMEX-traded oil was just under
$96 per barrel. In other words, oil futures are nowhere close to
being just 10 percent below the 2008 highs.
XLE is not the only equity-based energy ETF that has broken
out is or on the cusp of doing so. Here are a few more ETF ideas
for an ongoing energy sector rally.
PowerShares Dynamic Energy Exploration & Production
) By the standards of many energy
such as XLE, PXE is small with just about $111 million in assets
under management. A few months ago, we warned
that was the wrong way of looking at things
PXE is proving that assessment accurate as the ETF has jumped
over 12 percent in the past month. This is not a cap-weighted
ETF, so investors do not need to worry about excessive weightings
to the energy sector's usual suspects such as Exxon Mobil (NYSE:
) and Chevron (NYSE:
). PXE's top four holdings - Southwestern Energy (NYSE:
), Occidental Petroleum (NYSE:
), ConocoPhillips (NYSE:
) and Murphy Oil (NYSE:
) - sport weights ranging from five to 5.7 percent of the ETF's
In terms of breakouts, PXE recently cleared horizontal
resistance at $32 and the next up leg will come when the ETF
First Trust ISE-Revere Natural Gas Index Fund (NYSE:
) Rebounding natural gas futures
have been a boon for
for FCG in recent weeks as the ETF's 12 percent gain in the past
month has helped it clear a downtrend line that dates back to
last September. FCG, which has $455.5 million in assets under
management, now has a clear runway to attack its 52-week high
While FCG does offer ample exposure to oilier stocks such as
) and Anadarko (NYSE:
), many of the fund's 26 other holdings still produce more
natural gas than oil. That translates to FCG having a noticeable
correlation to natural gas futures. That is good when natural gas
prices are rising as they have been recently, but presents a risk
to investors if gas prices tumble.
Market Vectors Unconventional Oil & Gas ETF (NYSE:
) With just $15.8 million in assets, FRAK is by far the smallest
ETF mentioned here, but the ETF's diminutive status belies its
solid performance. Helped
in part by its 8.5 percent weight to
Occidental, FRAK has gained just over 11 percent in the past
That has enabled the ETF to clear horizontal resistance at $26
and FRAK is now working on clearing the $26.50, which is roughly
the area at which the ETF was priced at when it came to market in
February 2012. Occidental, Anadarko and EOG Resources (NYSE:
) combine for about 23 percent of FRAK's weight.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.