Market action late last week gave us a glimpse of where traders are putting their money — and what sectors are signaling confidence in the strength of the U.S. economy.
Travel and Energy (XLE) stocks are standing out, offering solid setups for traders looking to capitalize on optimism about continued growth.
While the broader market chopped sideways late last week, the strength in these areas was clear. Let’s break down what we’re seeing and why these sectors deserve attention.
Travel Stocks Breaking Out
Travel-related names, including airlines and cruise lines, are showing signs of life.
United Airlines (UAL), up another 2.6% this morning, stands out as the strongest among its peers — and in the entire market — with a very bullish setup. While Delta Airlines (DAL) and Southwest Airlines (LUV) are also trending upward, they aren’t matching the momentum of UAL.
If you’re looking for potential entries in the airline space, UAL is the one to watch.
On the cruise line side, we’ve got some exciting moves as well.
Though pulling back this morning, Royal Caribbean (RCL) has been strong and looks poised for a breakout — an ideal scenario for traders waiting for confirmation. Carnival Cruise Lines (CCL) already broke out but will need to show continued strength before it becomes a more reliable play.
Norwegian Cruise Line (NCLH), meanwhile, still needs to bounce off its 20-day exponential moving average to confirm a bullish setup.
The takeaway?
Travel stocks are signaling optimism about economic strength, and the strongest plays in this space — UAL and RCL — could offer excellent opportunities with the right technical confirmations.
Energy: A Steady Uptrend
The Energy sector (XLE) also deserves attention as it continues to trend upward (though pulling back some this morning). We’ve recently hit a key level discussed earlier last week, and if energy stocks can break above it, the sector could be ready for its next leg higher.
What’s driving this strength?
It’s a combination of factors, but the underlying theme is confidence in demand — a reflection of optimism about continued growth in the U.S. economy. As travel picks up and broader economic activity holds steady, the demand for energy supports this sector’s bullish case.
How to Play It
Both travel and energy stocks are worth keeping on your radar as potential longs. While the setups are promising, patience remains key. Wait for confirmation on technical levels — like breakouts above the 8- and 20-day EMAs — before jumping in.
As always, balance is crucial.
While these sectors offer upside potential, managing risk and staying disciplined with entries and exits will keep you in the game if the market surprises us.
With optimism building in travel and energy, these areas offer compelling opportunities — but don’t forget to watch for the confirmation signals that separate good trades from great ones.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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