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Markets and the XLE

Today the markets continued it move higher in a relatively lack luster way compared to Fridays action when the turmoil in Egypt soften with Hosni Mubarak stepping down as president.  The strong buying in the markets continues as two of the major three indexes make new 52 week highs.  The Dow Jones Industrial Average (DJI) was the index today that did not make new highs with the SPY and NASADQ, which could have prompted a sell divergence in the markets, but was not realized in today’s price action.  Showing continued strength in the markets. 

The energy sector performed very well today as many of the Keystone Trading Groups components watched in the XLE (energy ETF) made 52-week highs.   Exxon-Mobil (XOM) had an explosive day right out of the morning trading and continued to push higher throughout the day on strong volume.  While smart trading cautioned traders to be less aggressive until we broke the $84.00 two week resistance level, once above price action continued higher another dollar with little resistance.  Valero Energy (VLO) was another stock that had a strong morning and once above Fridays highs took off another .75 cents in the longs flavor. 

Another stock that looks interesting and shows promise for a continued move higher is Baker Hughes (BHI).  While the stock did not breakout like some of its counterparts today, this two week low volume pause looks ripe for the stock to push higher in a big way.  It looks similar to XOM on the daily charts.  As XOM had an huge move in the beginning of the month followed by two week low volume pause that resulted in an explosive move higher in today’s price action.  I will be looking BHI and other components in this sector to continue higher in the upcoming weeks.  

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