By Doug Busch
Energy was the best performing of 11 major S&P 500 sectors last week as the State Street Energy Select Sector SPDR ETF gained nearly 7%.
Energy currently makes up only about 4% of the S&P 500, a historically low weighting despite its importance to the global economy. As the AI buildout accelerates demand for electricity, data centers, and reliable baseload power, energy infrastructure and fuel supply will have to play a larger role than the index weighting suggests.
In that setting, let's look at Chevron, Phillips 66, and EQT Corp. and analyze their technical positions.
Chevron has delivered solid returns, up 25% year to date and 37% over the past 12 months while paying a dividend close to 4%. The stock trades 11% below its 52-week high. It rose 5% last week, advancing every day. The daily chart illustrates how Chevron recently made a higher low on the MACD and appears to be building the right side of a cup base.
On March 31, the stock completed a bearish evening star that triggered a sharp 14% drawdown before finding support with a bullish hammer on April 17. That pullback followed an impressive 14-week winning streak to start 2026. The rally began shortly after a double-bottom breakout above the $158.05 pivot on Jan. 5, which sparked a move of more than 5% on tremendous volume.
Enter here and add exposure on a breakout above the cup-base trigger at $214.81. Look for the stock to travel toward $253 by early 2027, implying 32% upside from current prices. Remain bullish above $183. Chevron was trading around $190 Monday.
Phillips 66 operates the largest refinery systems in the U.S. The stock is up 36% this year. Its weekly chart has recaptured the long, two-year cup base breakout above a $174.18 pivot that was originally taken out in late March. The depth of the cup base bounced off the very round $100 number last April.
Looking at the daily chart, the stock spent much of February and March trading above the overbought 70 level on the RSI, which signals strong leadership rather than exhaustion:
Technicians frequently note that one of the most bullish signals is a persistently overbought condition. Phillips' setup suggests the stock could revisit those levels again. It has a history of breaking out from well-formed bases. That began with a move above a double-bottom pivot at $128.61 last summer, followed by a bullish inverse head-and-shoulders breakout in early February. The stock has now carved out a cup-with-handle pattern that began forming after a bearish dark cloud cover on March 30.
Enter here and add to with a breakout above the $181.51 trigger. The stock could reach $218 by year-end, a 24% gain from current prices. Remain bullish above $170. Phillips 66 was trading around $173 Monday.
EQT Corporation, the largest natural gas producer in the U.S., has registered pedestrian gains of 4% year to date and 1% over the past year as natural gas hasn't enjoyed the run that crude oil has. The daily chart, shows bullish RSI divergence as the indicator formed higher lows in April and May while the share price made a lower low:
That type of divergence can often signal weakening downside momentum. Doji candles have effectively identified short-term tops in the stock, with notable occurrences on June 18, July 16, Dec. 5, and March 27. The most recent doji helped mark the start of a double-bottom base that ultimately found support at the 200-day simple moving average.
That support level also successfully retested the prior breakout above the $55.30 double-bottom trigger, which was cleared on Jan. 23. Enter here and add above the $60.89 pivot. The stock could reach $74 by year-end, a 32% gain from current prices. Remain bullish above $54. EQT Corporation was trading around $57 Monday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 18, 2026 10:45 ET (14:45 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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