The Select Sector SPDR - Energy (XLE) peaked in late February at $76.50 and is currently down 9.6% from the highs. Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) account for over 34% of this ETF.

• The 38.2% Fibonacci retracement support level at $68 has been tested over the past two weeks
• The chart has trend line support in the $67.20 area with the 50% support level just above $65
• Daily relative performance, or RS analysis, broke support, line b, in mid-March. The RS line is trying to turn up but is still below its weighted moving average (WMA)
• The uptrend in the daily OBV, line c, was broken on April 5. The OBV is well below its declining weighted moving average
• Weekly OBV (not shown) does look better, as it is still above its recent lows. A strong, high-volume rally would be needed to turn it around
• There is initial resistance at $71.50 and a daily close above $73 is needed to break the daily downtrend

The SPDR S&P Oil & Gas Exploration ETF (XOP) has also been under pressure for the past five weeks, and it is down 14.1% from the high at $65.81. The largest holding in this ETF only amounts to just a few percent of the fund’s holdings, so it is much more diversified than XLE.

• The 38.2% support level has been broken with the 50% Fibonacci retracement support level at $49.80
• XOP has major 61.8% retracement support at $46.85
• Relative performance still indicates that XOP is acting weaker than the S&P 500, as it has broken support (line d) and is below its weighted moving average
• Weekly OBV dropped below its weighted moving average three weeks ago and is now close to important support at line f
• There is near-term resistance at $54.50-$55.50 and then major resistance at $58

What It Means: The technical action indicates that crude oil and unleaded gas are likely to decline further, which should be a plus for the economy and consumers. The remaining question is whether the lower prices are also reflecting future economic weakness.

I would expect that energy stocks could bottom ahead of crude oil, and I will be watching the Select Sector SPDR - Energy in the $65 to $66 area, risking to a level below monthly chart support in the $62.80-$63.80 area.

Because it is more diversified, I favor the SPDR S&P Oil & Gas Exploration ETF in the $50to $51 area, risking to under monthly support at $48.

There are no new buy recommendations at this time.