Nobody likes energy stocks. And it’s not hard to see why.
For most investors, energy has been a graveyard since the Great Financial Crisis. While other sectors delivered life-changing returns, energy quietly went nowhere.
On a total-return basis, the energy sector is up less than 80% since 2008. On an equal-weight basis, it’s up barely 40%.
That works out to roughly a 2% to 3% annualized return during one of the greatest bull runs in American history.
Technology tells a completely different story.
Since the summer of 2008, the tech sector is up roughly 1,000% on an equal-weight basis. On a market-cap-weighted basis, it’s up more than 1,500%.
Those are the kinds of gains that shape careers, portfolios, and your family’s lives.
That kind of performance gap leaves scars. Recency bias takes over. Investors stop paying attention. Eventually, an entire sector gets written off as uninvestable.
And yet, as we begin 2026, something interesting is happening. One of the most important energy stocks in the world is quietly pushing to new highs.
That alone makes it worth paying attention to.
The Venezuela Question
There was a lot of chatter over the weekend about what energy prices and energy stocks might do after fake Venezuelan President Nicolás Maduro was reportedly detained and brought to the United States.
Venezuela is believed to hold the largest oil reserves in the world, with estimates north of 300 billion barrels. That immediately led to speculation.
Would more supply eventually hit the market and push prices lower? Would the United States take control of production and drilling operations? Would this be bullish, bearish, or irrelevant for energy stocks?
This is not my area of expertise, and I try hard to stay in my lane. What I noticed instead was the volume of guesses being thrown around, especially with prices sitting at important levels.
That kind of uncertainty and armchair forecasting tends to show up right before outsized moves. When everyone is debating implications instead of reacting to price, my spidey senses start to perk up.
As I write this, Exxon Mobil (XOM), the largest oil and gas company in the United States, is up another 4% to start the week.
A Stock That Has Gone Nowhere for a Long Time
It’s easy to forget how long XOM has been stuck.
The stock peaked during the Great Financial Crisis in 2008. It peaked again ahead of the 2014 collapse that dragged on through the COVID period. It finally broke out in 2022.
Since that breakout, Exxon has made very little progress. And that’s not a negative.
What the chart shows is a multi-year consolidation taking place above former resistance:
All that old overhead supply has already been absorbed. The stock is now building a base on top of it.
Bases that form above prior resistance are far healthier than bases that form below it. This one fits squarely into the first category.
And those are the bases that tend to matter most.
The Top/Down Approach to Energy
As we discussed in last week’s sector review, energy has gone essentially nowhere for more than 17 years.
From a top-down perspective, this is the largest base anywhere in the market. That matters.
Around here we repeat a simple idea: “The bigger the base, the higher in space.”
Long consolidations frustrate both buyers and sellers. They wear people out. And when they finally resolve, they tend to do so with authority.
This is exactly the type of setup that often precedes major leadership changes:
Sector rotation is the lifeblood of a bull market. Leadership never stays concentrated for long. Over time, it rotates.
Technology, financials, industrials, and other groups have already had their moment in this cycle. Energy has not.
While much of the market delivered historic gains, energy spent years absorbing past excesses and repairing long-term damage.
That process is slow and frustrating, but when it finishes, the move is usually meaningful.
We may be approaching that point.
A decisive breakout in the State Street Energy Select Sector SPDR ETF (XLE) would be an important signal that rotation is underway.
Even more compelling would be leadership from the largest stock in the group.
If Exxon Mobil pushes to new all-time highs, it would mark the completion of a multi-year base and confirm that leadership is finally stepping up.
When the biggest name in a sector begins to lead, the rest often follows.
Energy remains widely ignored. That’s precisely why this matters.
The largest base in the market is sitting in the most disliked sector, during a bull market that has already rewarded almost everything else.
That combination is rarely random.
Seventeen years of frustration has built an enormous amount of stored potential.
When this group finally moves, it will not ask for permission. It will force attention.
The only question is whether you are watching now, or whether you will notice after everyone else does.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs