Geopolitical developments over the weekend have resulted in about a 6% spike in WTI crude oil prices Monday, extending their year-to-date uptrend. The rise in crude oil prices has fueled a sharp runup in energy stocks, but a few bellwethers are showing signs of upside exhaustion that warrant patience for investors looking to take advantage of their bullish longer-term technical setups. WTI crude oil appears to be turning the corner on a long-term basis. The monthly MACD has triggered a "buy" signal, reflecting an important shift in long-term momentum that suggests a multi-month turnaround is taking shape. With Monday's move, WTI crude oil is now above key resistance near $68 a barrel, so we are watching for a breakout above that level to be made decisive next week as confirmation of a long-term reversal.
With crude oil showing signs of a turnaround, it's not surprising to see that strength reflected in energy stocks. From a long-term perspective, both Baker Hughes (BKR) and Exxon Mobil (XOM) have taken meaningful steps forward in 2026. Each has pushed to new multi-year highs, reinforcing that leadership within the energy sector remains intact and that cyclical and secular uptrends are in force. Importantly, both charts are also supported by long-term upside momentum, with their monthly MACD histograms both positive and rising.
The message is more cautious near term, however, noting both BKR and XOM have registered counter-trend signals from the DeMark Indicators, denoted by "13s" on the weekly charts. This suggests their rallies are overextended, enhancing overbought conditions from the weekly stochastics, and therein increasing the likelihood of a pullback or digestion phase. The short-term setup tells us not to chase the news-driven strength in energy stocks, but rather to wait for the uptrends to be refreshed by a period of corrective price action. The rising 50-day moving averages are initial support for both BKR and XOM, near $54 and $135 respectively.
The long-term setup for large-cap energy stocks remains bullish, supported by the potential for a lasting turnaround in WTI crude oil. However, the latest surge in BKR and XOM makes the charts look stretched in the short term. We would look to add exposure after a few weeks of consolidation.