Drill Baby Drill is Having Its Impact on Both Crude Oil and Oil Companies

April Crude Oil and XLE (Select Energy SPDR ETF)-- Fllow member ChrisA has asked for a technical update on XLE, but first let's take a look at the pattern setup in April Crude Oil futures, which we see has pressed to a $65 handle, down 18% from a $79 handle just seven weeks ago. Although there is a support plateau at 64.70-65.00, the "magnetized price level" on my attached Daily Chart is closer to 63, which represents the support line from the December 2023 low... 

With April Crude pointing due South, XLE is under sympathetic downside pressure that points to a full-fledged retest of a multi-month support plateau at 82.75-83.00. If XLE slices beneath 82.75-- and follows through below 82.30, the price structure will be vulnerable to continued weakness to 75.35/40 next. 

From a Big Picture pattern perspective, unless and until XLE breaks and closes beneath 82.30, I am treating all of the price action off of the December 2024 bull phase high at 98.87 as a sideways, still potentially bullish digestion period rather than a Distribution Top formation that will shift to my preferred pattern on a close beneath 82.30... 

Drill baby drill is having its impact on both Crude Oil and Oil companies largely because the pressure on Oil itself and the prospect of low $60/bbl prices (and indeed into the $50s) will slice and dice profit margins significantly. Last is 65.67...