{"id":188045,"date":"2023-04-04T11:50:12","date_gmt":"2023-04-04T15:50:12","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=188045"},"modified":"2024-01-24T12:14:07","modified_gmt":"2024-01-24T17:14:07","slug":"chart-advisor-fueling-up","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-fueling-up\/","title":{"rendered":"Chart Advisor: Fueling Up"},"content":{"rendered":"\n<p><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>By&nbsp;<\/strong><\/a><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>J.C. Parets<\/strong><\/a>&nbsp;&amp;&nbsp;<a href=\"https:\/\/get.allstarcharts.com\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>All Star Charts<\/strong><\/a><\/strong><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-monday-3rd-april-2023\">Monday, 3rd April, 2023<\/h2>\n\n\n\n<p><strong>1\/ Fueling Up<\/strong><\/p>\n\n\n\n<p><strong>2\/ Sector Rotation<\/strong><\/p>\n\n\n\n<p><strong>3\/ Embarking on a Bullish Month<\/strong><\/p>\n\n\n\n<p><strong>4\/ Europe Resolves Higher<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-fueling-up\">1\/ <strong>Fueling Up<\/strong><\/h2>\n\n\n\n<p>Energy stocks have rallied more than 10% in just over a week. In the middle of March, we were discussing the damage to the structural trends in the <a href=\"https:\/\/www.investopedia.com\/terms\/e\/energy_sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">energy sector<\/a> and watching the 2018 highs for signs of further downside.<\/p>\n\n\n\n<p>These stocks have reversed course over the past week, shifting from short-term <a href=\"https:\/\/www.investopedia.com\/terms\/l\/laggard.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">laggards<\/a> to leaders. With bulls coming out to defend the 2018 highs in crude oil near $75 per barrel, we want to shift our focus to shorter timeframes to analyze the tactical trends:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/1-2-1100x511.png\" alt=\"\" class=\"wp-image-188053 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/511;\" \/><figcaption class=\"wp-element-caption\"><strong>Source:<\/strong> <strong>All Star Charts, with data provided by TradingView<\/strong><\/figcaption><\/figure>\n\n\n\n<p>When we draw <a href=\"https:\/\/www.investopedia.com\/terms\/f\/fibonacciretracement.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">Fibonacci retracement<\/a> lines based on the second half of the 2022 rally, we obtain logical levels that coincide with pivot lows.<\/p>\n\n\n\n<p>After falling roughly 20%, the energy sector ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLE&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">XLE<\/a>) appears to have found <a href=\"https:\/\/www.investopedia.com\/terms\/z\/zone-of-support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">support<\/a> at its 61.8% retracement last month. Coming into the new week, we\u2019re seeing bullish follow-through as price gapped higher by 4.5% today, taking out a shelf of recent lows at the 38.2% retracement. <\/p>\n\n\n\n<p>This recent strength from energy stocks is just the latest example of the constructive <a href=\"https:\/\/www.investopedia.com\/articles\/trading\/05\/020305.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">sector rotation<\/a> that has been taking place since late last year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-sector-rotation\">2\/ <strong>Sector Rotation<\/strong><\/h2>\n\n\n\n<p>Sector rotation is the lifeblood of a <a href=\"https:\/\/www.investopedia.com\/terms\/b\/bullmarket.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">bull market<\/a>. <\/p>\n\n\n\n<p>The bubble chart below shows each <a href=\"https:\/\/www.investopedia.com\/terms\/l\/large-cap.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">large-cap<\/a> sector fund&#8217;s 2022 performance on the y-axis and the quarter-to-date return on the x-axis:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/2-2.png\" alt=\"\" class=\"wp-image-188054 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><figcaption class=\"wp-element-caption\"><strong>Source:<\/strong> <strong>All Star Charts, with data provided by Koyfin<\/strong><\/figcaption><\/figure>\n\n\n\n<p>As you can see, technology (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLK&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>), communications (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLC&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">XLC<\/a>), and <a href=\"https:\/\/www.investopedia.com\/terms\/c\/consumer-discretionary.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">consumer discretionary<\/a> stocks (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=XLY&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">XLY<\/a>) have recorded a solid gain over the past quarter. However, when we look at the returns of the <a href=\"https:\/\/www.investopedia.com\/terms\/v\/valuestock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">value-oriented<\/a> and <a href=\"https:\/\/www.investopedia.com\/terms\/d\/defensivestock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">defensive<\/a> sectors, they have performed slightly lower to unchanged during this time.<\/p>\n\n\n\n<p>This tells us that the stocks that were laggards last year are now the leaders in 2023.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-embarking-on-a-bullish-month\">3\/ <strong>Embarking on a Bullish Month<\/strong><\/h2>\n\n\n\n<p>From a <a href=\"https:\/\/www.investopedia.com\/terms\/s\/seasonality.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">seasonality<\/a> perspective, we are now entering one of the best months of the year for the stock market. <\/p>\n\n\n\n<p>Based on historical seasonal trends since 1950, April has been the second-best month of the year for equities, averaging a 1.53% return for the S&amp;P 500. It also ranks fourth best over the trailing decade and 5-year period.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"484\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2-1100x484.png\" alt=\"\" class=\"wp-image-188055 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2-1100x484.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2-700x308.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2-300x132.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2-768x338.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/3-2.png 1368w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/484;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>This tells us that seasonality remains a tailwind for equities. We could expect April to be a strong month for stocks, adding to the bullish developments of the trailing two quarters. However, if the bulls do not appear, it could be a warning sign of further turmoil or a return to the volatility that plagued much of March.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-europe-resolves-higher\">4\/ <strong>Europe Resolves Higher<\/strong><\/h2>\n\n\n\n<p>Throughout the past six months, European equities have outperformed their U.S. counterparts. <\/p>\n\n\n\n<p>The <a href=\"https:\/\/www.investopedia.com\/terms\/d\/dowjoneseurostoxx50.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">Euro Stoxx 50<\/a> ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=FEZ&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">FEZ<\/a>) has risen almost 50% from its lows, reaching new 52-week highs last week:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/04\/4-2-1100x546.png\" alt=\"\" class=\"wp-image-188059 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/546;\" \/><figcaption class=\"wp-element-caption\"><strong>Source: All Star Charts, with data provided by Optuma<\/strong><\/figcaption><\/figure>\n\n\n\n<p>As you can see in the above chart, price has not only rallied in a near-vertical line since October, but buyers have taken control and reclaimed a shelf of former lows from 2021. If this <a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakout.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=8758176-20230403&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=040323\" target=\"_blank\" rel=\"noreferrer noopener\">breakout<\/a> sticks, the bias could remain higher for European stocks.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 3rd April 2023, 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Energy stocks have rallied more than 10% in just over a week. In the middle of March, we were discussing the damage to the structural trends in the energy sector and watching the 2018 highs for signs of further downside.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[14,5,18,6,8,9,22,23,3],"tags":[14482,207,1049,2223,1302,1283],"contributors-categories":[13686],"class_list":{"0":"post-188045","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-etfs","7":"category-europe-middle-east-africa","8":"category-macro","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-stocks","13":"category-technical-analysis","14":"category-traders-insight","15":"tag-fez","16":"tag-spx","17":"tag-xlc","18":"tag-xle","19":"tag-xlk","20":"tag-xly","21":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Fueling Up | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Energy stocks have rallied more than 10% in just over a week. 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