Oil & Gas Equipment and Services ETF Resumes Gains | chart of art

The Oil & Gas Equipment and Services ETF (XES) is showing strength in March, surpassing its 40-week SMA. More importantly, the long-term trend is upward and this week’s breakout argues for a continuation of this upward trend.

The chart below shows XES seeing a significant surge in the fourth quarter of 2020. Although this move reversed a long-term downward trend, the gains over the past three years have been quite uneven. The green dotted line shows a rising channel with the 40-week SMA (red line) in the center. XES slowly zigzagged upward, crossing this moving average several times. Despite the choppy trading, the long-term trend is evident in this chart. See the end of this article for special offers from TrendInvestorPro.

In the short term, we are seeing a decline followed by a breakout. Shades of red represent previous declines of less than 40 weeks, with each decline representing more opportunity than threat. XES fell below its 40-week SMA in December and remained low from early January to early March. The ETF has been on the rise for the past few weeks and surged above its 40-week SMA this week. This move reverses the downtrend within the rising channel and argues for the continuation of the larger uptrend. The upside target is around 110 and a close below 81 may require a reassessment.

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