APA and Woodside Energy Have Fuel in the Tank to Go Higher -- Barrons.com

By Doug Busch

From a sector perspective, energy has proven highly resilient in 2026, delivering standout equity performance despite geopolitical shocks and elevated commodity volatility.

The State Street Energy Select Sector SPDR ETF, a top-heavy fund dominated by Chevron and ExxonMobil, underscored that strength last week, surging 8% for its best weekly advance in nearly four years.

The fund broke above its $60.55 double-bottom-with-handle pivot on Aug. 11 and advanced each day last week, consistently closing near the top of its daily range, a clear sign that buyers are firmly in control. With that strength, APA and Woodside Energy Group warrant a closer look.

On a year-to-date basis, the XLE is also the top-performing major S&P sector, with an impressive 40% gain. The ETF opened 2026 with a remarkable 14-week winning streak before encountering price turbulence, including a sharp three-week slide that began with a bearish dark-cloud-cover and saw the fund fall 5% in the first week of April. Yet the setback proved temporary.

The fund has since staged a powerful recovery and now sits less than 2% below the 52-week highs reached on the final trading day of the first quarter. That durability and a decisive price recovery are precisely why I remain bullish on the sector's prospects heading into the year's end.

Let's turn to the daily charts of APA and Woodside Energy Group ADR to better understand the technical setups behind our bullish outlook.

APA, an oil and natural gas exploration and production play, is up nearly 100% over the last one year, more than double the gain of the XLE, and pays a dividend yield of 2.5%. The stock is on a six week win streak, its first since an 11-week streak between January and the end of March.

Looking at the ratio chart against the XLE, it has broken above a four-month downtrend, signaling improving relative strength. This move coincides with the formation of a double-bottom base, which began with a bearish dark-cloud-cover on the final trading day of the first quarter.

The middle portion of the base featured a doji followed by a bearish engulfing candle on May 19 and 20. Last week, the stock formed a handle after surging 9% on Monday, its strongest one-day gain in 10 months, and then registering three consecutive doji candles. Given the setup, I would wait for confirmation with a break above the $41.34 trigger.

If that breakout occurs, I believe the stock could reach $55 by early 2027, representing 34% upside from current levels. Remain bullish above $38.

APA was trading around $40.50 Monday.

Woodside Energy Group ADR, an Australian oil and gas play, is higher by 32% year to date and pays a dividend yield close to 5%. The stock is 8% below its 52 week high but has advanced six of the last seven weeks.

Looking at its daily chart, the stock has lagged the XLE on the ratio chart since mid-April. However, the price action is telling a more constructive story. The bullish setup began in late January with a breakout above an ascending triangle, which marked the early stages of a bull-flag.

The $25 pivot was never broken above, as three doji candles and a bearish shooting star in March and April halted the advance. From there, however, a double-bottom base developed, with both lows finding support at the 200-day simple moving average in late June. I also like the fact that the stock reclaimed its 21-day exponential moving average in early July, a level that has repeatedly served as important support and resistance throughout 2026.

Enter here and add to the position above the $24.81 double-bottom trigger. The stock could reach $31 by year-end, representing 35% upside from current levels. Remain bullish above $21.75.

Woodside Energy Group ADR was trading around $23 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.

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August 17, 2026 13:33 ET (17:33 GMT)