Oil & Gas Equipment & Services ETF Resumes its Uptrend

The Oil & Gas Equipment & Services ETF (XES) is showing strength here in March as it breaks back above its 40-week SMA. More importantly, the long-term trend is up and this week's breakout argues for a continuation of this uptrend.

The chart below shows XES with a big breakout surge in the fourth quarter of 2020. Even though this move reversed the long-term downtrend, the advance over the last three years is quite choppy. The green dashed lines show a rising channel with the 40-week SMA (red line) in the middle. XES crossed this moving average several times as it slowly zigzagged higher. Despite choppy trading, the long-term trend is clearly up on this chart. See the end of this article for special offer from TrendInvestorPro.

Short-term, I am seeing a breakout after a pullback. The red shadings show prior dips below the 40-week and each dip represented more of an opportunity than a threat. XES dipped below the 40-week SMA in December and remained below from early January to early March. The ETF turned up the last few weeks and surged above its 40-week SMA this week. This move reverses the downswing within the rising channel and argues for a continuation of the bigger uptrend. The upside target is around 110 and a closes below 81 would argue for a re-evaluation.

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