Energy stocks are on fire.
The XLE energy ETF is tracking for a seventh straight positive session on Wednesday in its longest streak in four months.
Miller Tabak equity strategist Matt Maley says the charts show a bigger breakout ahead for one sector stock: Hess.
“It’s actually broken some key resistance levels,” Maley told CNBC’s “Trading Nation” on Tuesday. “For instance, earlier this year, it broke above its multiyear trendline going all the way back to about 2014, so that was very positive.”
“Then, more recently, the stock has made a couple of higher highs and higher lows so that’s very bullish so I think the momentum is already behind this stock,” he added.
The rest of the energy space also has more room to run as they catch up to the rally in oil markets, says Maley.
U.S. crude oil “saw a big rally from last June until mid-spring this year, so it’s holding up quite well, but a lot of these stocks are lagging behind the underlying commodity. So I think they can have some more upside here,” added Maley.
West Texas Intermediate crude has extended its comeback into 2018, rallying another 15 percent so far this year and capturing a four-year high above $70. The XLE ETF, meanwhile, is up just 4 percent this year.
So long as crude holds at its current levels, the energy sector should continue to perform well, says Boris Schlossberg, managing director of FX strategy at BK Asset Management.
“Oil has not come down below $60 as a lot of the bears had expected and as long as it stays a bit above that price, I think all of the whole oil-and-gas complex stays very safe as a long trade,” Schlossberg told “Trading Nation” on Tuesday.
Crude oil prices have mostly held in the mid- to high-$60s this year, though they briefly dipped below $60 in February. Crude last traded at $70.71 a barrel on Wednesday.