Welcome back for another Top Down Trade of the Week.
This is a classic leadership scan.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week’s standout is Energy, which just jumped to the second spot in our sector rankings.
Energy was the best-performing sector this week, with $XLE reaching its highest level since early April.
Beneath the surface, many individual stocks are breaking out of short-term consolidation patterns. This suggests we could see some follow-through leadership from energy in the coming weeks.
Here’s a look at our overall industry rankings, which show Energy Equipment stocks reaching the sixth spot.
This group supplies the machinery, tools, and services that energy producers rely on to explore for and extract oil and gas.
The relative strength from equipment names has been off the charts of late. This is a risk-on signal for the broader energy trade.
Below are the Top 10 names in the Energy Equipment subsector, ranked by relative strength.
This week’s spotlight stock is Solaris Energy Infrastructure $SEI:
The stock carries a massive 30% short interest with a 5x days-to-cover ratio as price presses against the upper bounds of a one-year base.
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