XLE cleared resistance this week. Some of the names in the sector that look good: WLL, BEXP, NOG, CPX
You can thank the 10%+ rally in oil over the last few weeks for those gains in the energy sector. Oil is going to correct along with those stocks mentioned.
I'd scale into these on a pullback. I'd get out if the xle broke back down, or one of the issues broke back down (under support). Over time, I've found the oil stocks don't break out of nice bases unless oil is going to hold on to prices or go higher.
That's probably the worst sector to be a permabull in. Outside the crazy ride up to 147 and down to the low 30s, oil has been in range between the high 60s and mid-80s. Before the wild ride, it was in a similar range from the low 40s to 70. Inside that range, oil and stocks tend to go up after bottoming out. However, the economy begins feeling pain when oil hits about 82-83 (that's not an arbitrary number; studies have shown that). It affects consumer confidence and general sentiment about the economy. That shows up quickly in the stock market. Look at oil prices as stocks topped out in January, April and early August this year. We've just gone back into that painful 80s area. I'm not calling a top yet, but I'd personally be taking profits if I had oil stocks/ETFs.
With the stocks charts looking good, I'll just trade the charts with an initial 20-25% target. My stop is about 3% loss right now.
Wait till the dollar collapses, those oil stocks will be up over 100%. Nothing like worthless monopoly money and $100+ oil.