Energy has been the market’s quiet winner in 2026, with the exception of the second-quarter hiccup, and Wednesday reinforced that point.
While the S&P 500 slipped 0.5% and 10 of the 11 major sectors finished lower, the State Street Energy Select Sector SPDR ETF rose nearly 1% as Brent crude punched through the very round $100 number this week and looks like it wants to remain there.
The XLE is up 46% year to date, versus a 12% advance for the S&P 500, the kind of gap that usually belongs to a sector in a durable uptrend, not a two-week war trade.
Energy stocks do not move in lockstep every session with the commodity itself. A hot inflation print can knock the whole complex around. Still, the market action has been unambiguous. This group has led, it is still leading, and the simple mistake is fighting the trend instead of staying in it.
I have always liked to mention that inside your portfolio you want MLB All-Stars and not Triple-A ballplayers. In other words, I would rather own stocks that are already demonstrating strong price action, relative strength, and leadership than stocks that have yet to make their move. These stocks will often continue to lead. Let’s look at where Brent Oil can go from here and my favorite name in the space.
Looking at the daily chart of Brent, one can see it has traded reliably from a technical perspective both before and after the Iran war began at the end of February.
Notice the peak near $120 on May 9, marked by an incredibly long legged doji candle that had more than a $35 intraday range. That session was retested on March 19 with a spinning top, another candle conveying exhaustion. It resembled a capitulation top, as seen by the enormous volume between Feb. 26 and March 9.
From there, the technical signals began to shift.
A bearish MACD crossover occurred near the top, while the bullish MACD crossover came near the $70 low, marked by a bullish hammer candle on July 2. That hammer also filled the gap from the Feb. 27 session, which marked the start of the conflict. Round number theory has come into play at $100 with an upside gap fill on July 23 from the May 22 session.
On Thursday, Brent will look to achieve its second consecutive close above $100. A close above that level by the end of the week would confirm a bullish ascending triangle breakout, which could lead to a move toward $130 by year end. On the downside, a close below $95 would negate the bullish thesis.
Brent crude was trading around $107 Thursday.
Very strong break Thursday above bullish ascending triangle and distancing itself from key $100 level.
Canadian Natural Resources, a leading Canadian energy producer with additional exposure to natural gas, is up 52% year to date and pays a 3.5% dividend yield. The stock posted an impressive 10-week winning streak between January and March before finding a bottom with a weekly doji candle the first week of July. Since then it has regained its momentum, advancing eight of the past 10 weeks.
Looking at its daily chart, the ratio chart shows it has performed well against peers, specifically the State Street Oil & Gas Exploration & Production ETF, over the last year. It started 2026 with a bang, running 70% into the end of the first quarter. That move began at the $30 level and broke above the double-bottom trigger of $34.56 on Jan. 14.
More recently, the stock has shown encouraging resilience around the very round $50 number, acting considerably better than it did when it quickly retreated from that area in both March and May. A bullish island reversal then developed near the 200 day simple moving average, highlighted by a 4.3% gap up on July 8, following the 4% gap down on June 24.
It is now comfortably above the double bottom breakout trigger of $49.85, which was taken out on Aug. 20. This stock could reach $62 by year-end, a 21% gain from current prices. Remain bullish above $48.
Canadian Natural Resources was trading around $51 Thursday.
Stock holding the important $50 level well after shying away from area twice in the first half of 2026.